House Hearing, 113TH Congress - Threats To Israel: Terrorist Funding and Trade Boycotts

THREATS TO ISRAEL: TERRORIST FUNDING AND
TRADE BOYCOTTS
HEARING
BEFORE THE
SUBCOMMITTEE ON TERRORISM,
NONPROLIFERATION, AND TRADE
OF THE
COMMITTEE ON FOREIGN AFFAIRS

HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
MARCH 5, 2014
Serial No. 113128

Printed for the use of the Committee on Foreign Affairs
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EDWARD R. ROYCE,
CHRISTOPHER H. SMITH, New Jersey
ILEANA ROS-LEHTINEN, Florida
DANA ROHRABACHER, California
STEVE CHABOT, Ohio
JOE WILSON, South Carolina
MICHAEL T. MCCAUL, Texas
TED POE, Texas
MATT SALMON, Arizona
TOM MARINO, Pennsylvania
JEFF DUNCAN, South Carolina
ADAM KINZINGER, Illinois
MO BROOKS, Alabama
TOM COTTON, Arkansas
PAUL COOK, California
GEORGE HOLDING, North Carolina
RANDY K. WEBER SR., Texas
SCOTT PERRY, Pennsylvania
STEVE STOCKMAN, Texas
RON DESANTIS, Florida
DOUG COLLINS, Georgia
MARK MEADOWS, North Carolina
TED S. YOHO, Florida
LUKE MESSER, Indiana
California, Chairman
ELIOT L. ENGEL, New York
ENI F.H. FALEOMAVAEGA, American
Samoa
BRAD SHERMAN, California
GREGORY W. MEEKS, New York
ALBIO SIRES, New Jersey
GERALD E. CONNOLLY, Virginia
THEODORE E. DEUTCH, Florida
BRIAN HIGGINS, New York
KAREN BASS, California
WILLIAM KEATING, Massachusetts
DAVID CICILLINE, Rhode Island
ALAN GRAYSON, Florida
JUAN VARGAS, California
BRADLEY S. SCHNEIDER, Illinois
JOSEPH P. KENNEDY III, Massachusetts
AMI BERA, California
ALAN S. LOWENTHAL, California
GRACE MENG, New York
LOIS FRANKEL, Florida
TULSI GABBARD, Hawaii
JOAQUIN CASTRO, Texas
THOMAS SHEEHY, Staff Director

AMY PORTER, Chief of Staff
JASON STEINBAUM, Democratic Staff Director
SUBCOMMITTEE
ON
JOE WILSON, South Carolina

ADAM KINZINGER, Illinois
MO BROOKS, Alabama
TOM COTTON, Arkansas
PAUL COOK, California
SCOTT PERRY, Pennsylvania
TED S. YOHO, Florida
TERRORISM, NONPROLIFERATION,
AND
TRADE
TED POE, Texas, Chairman

BRAD SHERMAN, California
ALAN S. LOWENTHAL, California
JOAQUIN CASTRO, Texas
JUAN VARGAS, California
BRADLEY S. SCHNEIDER, Illinois
JOSEPH P. KENNEDY III, Massachusetts
(II)
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CONTENTS
Page
WITNESSES
Mr. Edwin Black, author .........................................................................................
David Pollock, Ph.D., Kaufman fellow, The Washington Institute for Near
East Policy ............................................................................................................
Mr. Steven Perles, founder and senior partner, Perles Law Firm, P.C. .............
7
39
46
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Mr. Edwin Black: Prepared statement ..................................................................
David Pollock, Ph.D.: Prepared statement ............................................................
Mr. Steven Perles: Prepared statement .................................................................
9
41
48
APPENDIX
Hearing notice ..........................................................................................................
Hearing minutes ......................................................................................................
(III)
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83
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THREATS TO ISRAEL: TERRORIST FUNDING

AND TRADE BOYCOTTS
WEDNESDAY, MARCH 5, 2014
SUBCOMMITTEE
HOUSE OF REPRESENTATIVES,
ON TERRORISM, NONPROLIFERATION,
COMMITTEE ON FOREIGN AFFAIRS,
Washington, DC.
AND
TRADE,
The committee met, pursuant to notice, at 10 oclock a.m., in

room 2172 Rayburn House Office Building, Hon. Ted Poe (chairman of the subcommittee) presiding.
Mr. POE. This subcommittee will come to order. Without objection, all members will have 5 days to submit statements, questions,
extraneous materials for the record subject to the length limitation
in the rules.
Israel is our great friend and ally. For over 50 years, the United
States and Israeli leaders have been close friends. Our common
values of democracy and liberty unite us, among other things.
This administration sometimes forgets this. Be it the Iranian nuclear program or pressuring Israel over peace talks with the Palestinians, our recent policies have damaged our relationship.
I was in Israel not too long ago when I met with Prime Minister
Netanyahu when Secretary Kerry came down with the deal, the
bad deal, as Prime Minister Netanyahu referred to. We let Iran
walk all over us. At the end of the day, we weakened sanctions in
exchange for allowing Iran to continue to develop nuclear weapons.
In my opinion, the United States gave away the farm and the
mineral rights in this bad deal. The threats against our good friend
Israel are growing. The point of this hearing is to examine three
issues.
First, the issue of European countries boycotting Israeli businesses that are in the settlement areas. Make no mistake, this is
a political move, not an economic move.
Some European countries dont like Israeli settlements so they
are trying to shut them down by not buying any goods from Israel.
European Union is Israels number-one trading partner to the tune
of about a third in total trade.
If EU countries turn the heat on boycotts it could have dire consequences for the Israeli economy. In January, a $200-billion Dutch
pension firm divested from five top Israeli banks.
In January, Germany announced that it would not renew research grants to Israeli companies that do business over the Green
Line.
(1)
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2
I fear this is an intentional move to pressure the Israelis to give
ground, literally give ground, in peace talks with the Palestinians.
But boycotting goods is the wrong way to get peace. All issues, including the settlement issue, need to be solved at the negotiating
table with the Palestinians.
These boycotts will only strengthen the Palestinian hand and
make them less likely to agree to peace. The peace talks, in my
opinion, are useless unless the Palestinians agree at the outset and
say publicly and believe it that Israel has a right to exist as a nation.
The second issue on this hearing is the Palestinian Authority giving bags of money to convicted terrorists in Israeli prisons. Right
now, there are over 4,500 Palestinian prisoners in Israeli jails,
most of them serving time for terrorism-related crimes.
Many of these terrorists receive a salary directly from the Palestinian Authority. Monthly salaries range from $500 to $3,500. The
more serious the crime, the more dead Israelis or Americans, the
more money the Palestinians in jail receive.
In Palestine, being a terrorist is one of the best paying jobs. According to some estimates, the Palestinian Authority spends $4
million to $7 million per month on this program, which is about 6
percent of the budget.
One terrorist, Husni Najjar, explained to Israeli police after his
capture that he planned a terror attack in order to be captured so
he could receive money from the Palestinian Authority. Now, isnt
that lucky?
Here is the real problem. The United States gave $440 million
in Fiscal Year 2013 to the Palestinian Authority. We all know that
money is fungible. The more money we give to help them with
these job programs, the more money the Palestinian Authority
has to pay terrorists.
U.S. taxpayer money should not be paying and rewarding Palestinian terrorists for doing harm and killing Israelis and Americans.
I am also, finally, concerned about the lack of justice for American
victims in terrorist attacks that occur in Israel.
At least 54 Americans have been killed by Palestinian terror attacks since 1993. Another 83 have been seriously wounded. Some
perpetrators of these attacks have never been brought to justice.
Some have served limited sentences and then they were released.
The FBI could be doing more to track down these killers and
bring them to the United States to stand trial. I think the United
States Government owes that to the victims of these deadly attacks.
Victims of these attacks are also seeking justice through the U.S.
courts. The defendants are the Palestinian Authority and numerous foreign banks who are accused of funneling money to Palestinian terrorists.
In one case, which we will hear more about today, a Jordanian
bank is accused of laundering $90 million to Hamas through over
200,000 separate transactions. That is a lot of money and it buys
a lot of terror.
I look forward to hearing from our witnesses and what they have
to say today. I now move to our ranking member, Mr. Sherman,
from California for his remarks.
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Mr. SHERMAN. First, as to the Iranian deal, it is, clearly, imperfect.
But we should remember that from 1998 until 2010 three administrations failed to enforce the sanctions laws we did pass and,
more importantly, used all their power to go over a decade without
us passing any additional significant sanctions.
When we woke up in October of last year, we were in an incredibly weak bargaining position, strengthened only a bit by the sanctions adopted in 2010.
So it is hard to say that the deal reached in Geneva is the problem. The problem is that for over a decade we did nothing and it
is hard to win a football gameyou can yell at the coach as to
what play he calls in the fourth quarter. If you dont put a team
on the field the first three quarters, you are not going to find a
great play for the fourth quarter.
Now, as to these hearings, the effort to boycott and delegitimize
Israel is anti-Semitism, plain and simple. When the worlds only
Jewish state is held to standards no other state is held to and then
is subjected to punishments no other state is subjected to, the motivation becomes clear.
If the worst human rights abuse in the world is building an
apartment building in the wrong place, so any mistakedecisions
made by my own city council may fit into that categorywe in this
room have heard such incredible human rights abuses that those
who think that the only nation worthy of sanctions is one that
builds apartment buildings in the wrong place is veryit is antiSemitism, plain and simple.
In addition, there are those who focus on a particular instance
and say that a particular Israeli sergeant shouldnt have fired his
gun but should have waited longer for the potentially hostile person to approach even closer, even while yelling, Stop.
Well, none of us are in that position. Who knows how much we
would risk our lives in order to determine whether the person approaching and ignoring our demands to stop was a civilian or a terrorist.
But the fault of any incident and hundreds like that take place
every year is not the sergeant who does or does not risk his life
to this or that degree.
The fault are those politicians who seek unreasonable aims
through violent means. War is not the fault of those who fight it.
It is the fault of those who wage it.
As to the particular efforts by some to halt economic activity on
the West Bank by boycotting products grown or made there, this
is more than absurd.
You are going to strangle companies that provide jobs to Palestinians, then put on films about how the Palestinians dont have
jobs and then demand that the U.S. taxpayer give a lot of money
to the PA authority so they can employ people without jobs and
then, as the chairman points out, have the PA authority give that
money to terrorists.
I think the term is chutzpah. It is simply absurd for those who
claim to be concerned about the Palestinians to oppose investment
that creates Palestinian jobs and the only bad thing about the location of SodaStream is that they are not located in my district, the
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4
only place I would rather see jobs or one of the places I would rather see jobs than anywhere in the Middle East.
Finally, as to aid to terrorists, our efforts should begin at home.
There are those who providedU.S. citizens who are part of the
flotilla that provided aid to Hamas, those folks were violating U.S.
terrorist law.
We did nothing. Then there is Viva Palestina, which is on tape
we will show you the YouTubegiving assets to Hamas and soliciting tax deductible contributions from American taxpayers.
Finally, after considerable prodding, the IRS has begun the effort
and it is not yet effective to make sure that a particular organization doesnt advertise that you give money to them and they will
funnel the money to Viva Palestina which will fund the money to
Hamas and give you a tax deduction for it.
We have got to stop terrorist financing. It starts here. I yield
back.
Mr. POE. I thank the ranking member for his wise comments.
The Chair will recognize other members who want to be heard
for 1 minute. The Chair recognizes the other gentleman from California, Mr. Rohrabacher, for 1 minute.
Mr. ROHRABACHER. Thank you very much, Mr. Chairman.
I recentlywell, it was recently Ive been in Israel, it seems to
be someplace that all Members of Congress have to go and I did
speak to both sides.
I spoke to people in the Palestinian Authority as well as the
Israeli Government and I have come to the conclusion that there
is only one thing holding up peace right nowa peace agreement
between Israel and the Palestinian peopleand that is that the
Palestinian people will not forcefully and forthrightly announce
that they do not have a right to return to the pre-1967 borders of
Israel.
And, of course, Israel wont agree to that because we are talking
about millions of peoples right to inundate that country, which
would mean that country wouldnt exist anymore as the country
that it is.
And just like we, for example, couldnt sign a treaty with Mexico
saying that anybody who can trace their family roots back to the
Southwest has a right to emigrate into the United States and then
we would have 50 million to 75 million new American citizens, all
of whom are Mexican.
Now, I would hope that with all the other issues that we are
talking about that we put that in perspective. I think the other
issues, the settlements, all these other things are solvable.
But until the Palestinians step forward and make that agreement, Israel will exist. It will exist and we dont have a right to
inundate it with millions of other people, there wont be peace and
there wont be agreements, and I would certainly like the opinion
of our panelists today as to whether or not my perception of the
real stumbling block is really what it is all about.
So thank you very much, Mr. Chairman, for holding the hearing
so that we can enlighten ourselves and get some good information
to see maybe we can bring peace if we understand exactly what the
problem is. Thank you.
Mr. POE. I thank the gentleman.
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The Chair will also recognize another member from California,
Mr. Vargas.
Mr. VARGAS. Thank you very much, your Honor. I appreciate it,
and I thank you very much again, Mr. Sherman, for bringing this
issue forward so we can discuss it today.
I would associate myself with the comments that you made as
well as our ranking member and I would say this, that Israel is our
closest and faithful ally and we should act accordingly.
One of the things that is disturbing is to see some of these European nations acting, as I would say the same as the ranking member, in a very anti-Semitic way. You see all the human rights
abuses around the world and it is interesting, you only pick on
Israel.
Interestingly too I was in Israel recently and virtually every
Israeli that you talk to wants peace and in fact some of the things
that the government has been willing to dorelease murderers and
terroristsjust to talkjust to talk about peace, trying to get to a
settlement.
And you go to the Palestinian areas as we did and they only
speak hate and how much they hate the Jews and how much they,
you know, blame everybody else except for themselves for the situation they are in.
So, again, I thank you very much for bringing this forward and
I hope that we can act as a faithful ally as Israel has to us in a
very difficult part of the world.
Thank you, Mr. Chair.
The Chair will now recognize the gentleman from Pennsylvania,
Mr. Perry.
Mr. PERRY. Thank you, Mr. Chairman.
It is an important hearing. You know, we tend to think of the
fight against terrorism as a burden that falls mainly on the shoulders of government or military, diplomatic, homeland security and
law enforcement agencies.
Yet, there is one area where private citizens can play a leading
role and that is in stopping the flow of funds to terror organizations.
Beginning in the 1990s, Western countries and especially the
United States passed laws making it possible for victims of terror
to sue the regimes that sponsor terror, banks that transfer funds
to terror groups, front organizations that pretend to serve charitable causes, and even the terrorists themselves.
It is with this in mind that I would like to show some appreciation for the work of the Perles Law Firm and also the Israel Law
Center who work together with Western intelligence agencies and
volunteer lawyers around the world to file legal actions on behalf
of the victims of terror.
With that, I really look forward to your testimony here today.
Thank you, Mr. Chairman. I yield back.
Mr. POE. The Chair will recognize the gentleman from Massachusetts, Mr. Kennedy, for 1 minute.
Mr. KENNEDY. Thank you, Mr. Chairman.
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I want to thank the ranking member as well for calling this important hearing and the witnesses today for making themselves
available.
I very much look forward to your testimony and what you could
do to educate this subcommittee on the threats that an extremely
important friend and ally to the United States and the state of
Israel is facing.
And not just Israel but, really, thefrom my vantage point, as
a pillar of democracy and stability in the Middle East what their
reach of those that wish to do those forces of democracy and stability harm.
I, along with Mr. Vargas, had a chance to visit Israel a couple
of months ago and I was just recently in Asia with Mr. Sherman
as well, as we explored some of the threats and the complexities
confronting some of these forces literally around the world.
And so I want to thank the chairman for calling this hearing and
look forward to your testimony today.
The Chair will now recognize Mr. Lowenthal, also from California, for 1 minute.
Mr. LOWENTHAL. Thank you, Mr. Chair and Ranking Member
Sherman. I want to thank you for putting this hearing together in
order for our committee to examine some of the strategic issues of
interest to the United States and to the U.S.-Israel partnership and
Israels relation with the European Union and some of the critical
issues around that.
I just want to say, while I proudly consider myself pro-Israel,
which I am, and certainly anti-terrorist and I am very glad for this
hearing, I also believe as we listen and we understand that we take
an unbiased and objective point of view that if we are ever going
to have peace between the Israelis and the Palestinians that we
also hear and try to understand as much as possible the Palestinian point of view.
We may not always agree with it but we have to hear it and understand it and I think that is very important as we move forward.
Thank you.
Without objection, all of the witnesses prepared statements will
be made a part of the record. I ask that after I introduce each witness that they keep their presentation to no more than 5 minutes
and I will introduce each witness now and then give them time for
their statements.
Mr. Edwin Black is an award-winning New York Times best-selling author with more than 1 million copies in print. His work focuses on genocide and hate, corporate criminality, corruption and
historical investigation.
Mr. Black has been interviewed on hundreds of network broadcasts from the Today Show, CNN and NBC as well as leading
networks in Europe and in Latin America.
Dr. David Pollock is the Kaufman fellow at the Washington Institute where he focuses on the political dynamics of the Middle East.
He previously served as senior advisor for the Broader Middle
East at the State Department and in several other advisory posi-
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7
tions there, including 4 years as regional expert on the Secretary
of States policy planning staff.
Previously, he was also chief of Near East, South Asia, Africa Research at the U.S. Information Agency.
Mr. Steven Perles is the senior attorney and founder of the
Perles Law Firm. He has litigated matters before the Supreme
Court, courts of appeal, and district courts throughout the country.
His litigation practices focus is primarily on cases involving the
immunity of foreign sovereigns and has included several
groundbreaking cases against foreign states for their complicity in
acts of international terrorism.
Notable recent decisions include a successful turnover action
against a $1.9 billion Iranian Central Bank funds in which money
had been laundered into the United States.
I thank all three of you for being here. We will start with Mr.
Black.
STATEMENT OF MR. EDWIN BLACK, AUTHOR
Mr. BLACK. I thank this committee for inviting me. I am Edwin

Black and before I testify before any Parliament I always say I
come not as a Republican or a Democrat, a conservative or a liberal. I am here for my information.
I did hear the remarks of Chairman Poe and Member Sherman
and I found them to be factually accurate and historically incisive.
So I am here to talk about the Palestinian terrorists salaries,
which I broke in my book on November 1st of last year in canon.
My book is Financing the Flames and it is an inescapable reality
that American taxpayers are directly funding individual named terrorists for individual named terrorist acts, just as Chairman Poe
said. Here is how it works.
An individual in the Palestinian Authority can go from being a
nobody to a somebody, from rags to riches, just by committing an
act of terrorism, perhaps blowing up a bus or invading a home and
slicing the throats of children.
At that point, he will go on an immediate official Palestinian Authority salary. The more people you kill, the higher is your salary.
It can range, as you said, from a few hundred dollars a month for
maybe a 5-year sentence and it actually can go up to $10,000 a
month for a 25-year sentence.
The actual law itself which governs this is published in my book
on Page 184 and this is the actual law and you can see the sliding
scale. This money also includes a rank in the government. You become a manager, a director, a supervisor.
You can even become an Assistant Deputy Minister and so you
have a civil rank as well. This money constitutes about $5 million
to $7 million a month of PA resources.
It is prioritized, which means if they only have a million bucks
in the bank and there is no food or they are lacking medicines and
they need to pay these salaries, they pay the salaries first.
The money goes directly to the prisoner by means of a POA
that is a power of attorneyand he can then turn it over to his
girlfriend, to his mother, to his family, to his soccer club, to al
Fatah, whatever it is. It does amount to approximately 6 percent
of the PA budget.
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If there is any lack of alacrity in prioritizing these funds, there
is an NGO called the Prisoners Club that makes public agitation
to make sure that these moneys are paid. If you add in the additional emolumentswedding benefits, scholarships, soccer teams,
special celebrationsit comes to 16 percent of the Palestinian Authority budget.
All of this money comes from donor countries such as the United
States, and in the United States it is strictly against the law. The
individual that Chairman Poe identified, Husni Najjar, who deliberately committedinitiated a terrorist plot was seeking money for
wedding expenses.
So while Americans are choosing between food and fuel, Palestinians have an understanding that there is a bottomless pit of salaries for terrorists.
Now, there is never going to be peace in the Middle East between
the parties because the chief export is confrontation, terrorism.
This is athis is a business. It is kind of like asking the Saudis
to stop drilling for oil. This is what they do.
And the idea that this is not known is incorrect. It is true that
I broke this in my book here but everybody in this room knows
about this. Everybody in the Palestinian Authority knows about
this. The entire Western media knows about this.
The State Department has always known about this. The Foreign
Office, the foreign ministries overseas have always known about
this. The only one who has not been informed about this are the
members in this institution and the constituents who vote the
money.
Now, I have only got 6 seconds left so I wont go on. But if you
also wish to ask me any questions about this, the international
law, SodaStream or any of theor who is financing among our taxpayers BDS, I will be happy to answer those questions too.
And thank you very much for having me.
[The prepared statement of Mr. Black follows:]
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10
CHAPTER 11
Direct Taxpayer
Support for Terrorism
H e was just a clown. Big heart. Loved kids. Evyatar Borovsky,
age thirty-one, was devoted to helping people across Israel-people
of any background. His way was psychodrama and other role-playing techniques calculated to coax victims, especially children, out
of their traumatic fog. Often the children were survivors of terrorism. Evyatar was part of a so-called therapeutic theatrical troupe.
Now, he was advancing in his skill, studying to become a certified
medical clown. When dressed in his bright, rainbow-mottled costume, Evyatar could open the padlocked soul of a child struggling
to rediscover his or her path back. Evyatar was just a big guy with a
big heart-a very big heart.
*****
Terrorism plagues Israel as it does the world. But, whereas the
United States struggles to keep the threat from crossing our borders, in Israel, the challenge is to keep the peril beyond the next
hillside. In Israel, terror often lurks just across the street. To reduce
the risk, the Jevv'ish State has learned to build social and economic
bridges that dilute discontent and promote peaceful coexistence.
When bridges fail, Israel builds fences. When those fail, taller fences
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185
11
186
FINANCING HIE FLAMES
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86959a-3.eps
are built. If ordinary fences don't work, barbed wire is added. Not
enough? Add more barbed wire. If such measures prove insuilicient in certain locations, construct walls. Sometimes the walls must
be built ever taller to block snipers in elevated perches. Not tall
enough? Make them taller still. Terror persisting? Add watch towers. Dig trenches. Install electric monitors and cameras. In Israel,
high-tech and inanimate methods are always preferred to militarihed options.
Concrete has been known to the Middle East for more than
a thousand years. But in this century, a rash of suicide bombings
began to leach into the quality of daily life. Kindergartens, children's buses, teenage nightclubs, popular pizzerias, and other civilian soft spots became the targets for Palestinian mass murderers
in the 'Vest Bank, in West Jerusalem, or even the west side of a
beachfront avenue in Tel Aviv. Mass murdering in rebellion-torn
neighboring Arab realms-north, east, and south-multiplied to
astronomical levels. The permeable nature of Israel's border membrane was reconsidered and remodeled. The perimeter was made
taller, sturdier, and smarter. 1
No society wants to construct a national fence. India erected
one hundreds of miles long, separating the mainly Hindu nation
from mainly Muslim Pakistan-it is so brightly floodlit, it can now
be seen by NASA from outer space as an illuminated gash in the
subcontinent. Turkey assembled an unbreachable barbed \vire and
concrete "Green Line" across the island of Cyprus to hermetically
seal tens of thousands of Greek Orthodox Cypriots away from Muslim Turkish Cypriots-this follovving Turkey's 1974 invasion of the
island; the wall only came down in 2009. Great Britain established a
forty-foot-high "Peace Wall," cleaving the Catholic and Protestant
communities in Northern Ireland to divide the feuding parties. The
United States is building a multibillion-dollar, 13-foot-high, metal
protective waH, the "Secure Fence," along the Mexican border; it
even tries to briefly bifurcate the ocean at Tijuana. Saudi Arabia
is fast-tracking its horizon-wrapping Yemeni-Saudi Barrier, a barricade of barbed ,vire and concrete-reinforced pipe designed to span
the length of the Kingdom's 1,100-mile border. The world is filled
12
Direct Taxpayer Support for Terrorism
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with many other tall, obstructive barriers designed to keep warring

or dangerous parties on the other side. 2
Because of bridges, barriers, and social betterment, many
potential outbreaks of violence have remained within the fragile
Palestinian cryptodome. But the Palestinian Authority still lives
and breathes its legacy as a former Turkish domain bypassed by
the Industrial Revolution and neglected for centuries into the economic margins. During the .Mandate in Palestine, Arabs were killed
by their Arab neighbors for just intersecting ,,,ith the Jewish economy; and modernity itself-even electricity-was considered a western infection. Today, Palestinian society fights endemic joblessness
next door to one the world's fastest grovving and most enterprising
economies, one that 'Warren Buffett defined as "the leading, largest,
and most promising investment hub outside the United States."3
Moreover, "the Arab Street" is still the main thoroughfare of
every city from Tunis to Amman and from Damascus to Beirut.
Eventually, that incendiary road courses through Gaza City with an
off-ramp into the heart of Ramallah. True, in an Arab society stnlggling to get ahead, tens of thousands of Palestinians are gainfully
employed in Israeli factories, hotels, and other emerging opportunities. But this prosperity is often only accomplished stealthily and
not pridehllly. This same dynami.c means that the booming Palestinian cash crop is "protest and agitation" -and worse.
Indeed, terrorism itself is a salient Palestinian industry, boasting
high salaries and good benefits. For some-the perpetrators-it's
a living. For others-the victims-it's a dying. Salaries and benefits escalate the more heinous the act of violence. Most surprising,
this lethal economic mainstay is subsidized by American taxpayers
and taxpayers of other countries, collectively known as "the donor
countries. "
How does this work? Since the Palestinian Authority was created
in 1993, it has treated terrorists imprisoned in Israel as "employees," regardless of how revolting their crimes. Since the PA has
no regular army to speak of, terrorists are its main militants-and
are cherished by Palestinian society. The entire question of prisoners-far from being a source of collective revulsion-is among
13
188
FINANCING THE FLAMES
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the hottest buttons and most emotional topics in the Palestinian

ecosystem.
Depending upon the timeframe, Israeli prisons and jails hold
four thousand to five thousand security detainees, prisoners awaiting the judicial process, and convicted terrorists. Some are just
caught up in dragnets, some are suspected of complicity in terrorist plots, and about one thousand carry confirmed blood on their
hands. Many of the latter group have gleefully boasted of their horrific acts of murder against innocent civilians and are celebrated
within Palestinian society for their violence against Israelis. Because
there are so many security prisoners from so many villages, the subject reaches into average Arab households. "Prisoners Day" is April
17 and regarded as a national Palestinian observance. 4
The prisoners glorified by Palestinian society are not common
criminals convicted of transgressions as prosaic as theft, as horrific
as honor killings against female family members, or as corrupt as
trafficking in drugs or stolen goods. Rather, it is those who have
perpetrated crimes of terror against Israeli civilians or infrastmcture. Because, in the PA's mindset, terrorists are undertaking a
national duty, they are considered "employees" worthy of a salary.
As such, those terrorists receive monthly payments from the Palestinian national treasury, that is, from public governmental hmds
that are officially and openly allocated by the Palestinian Authority. The monthly payments constitute the highest levels of personal
compensation and family benefits anywhere in the Palestinian Territory, often dwarfing payments to civil servants. The salary expenditures amount to millions of dollars each month in direct payments
to the terrorists.
Two national bodies exist to process those salaries and other
benefits. The Palestinian Ministry of Prisoners Mfairs, established
in 1998, is an official bureaucracy of the Palestinian Authority,
commanding as much priority as the Ministries of Health or Education-but with far more gravitas. The Palestinian Ministry of Prisoners Mfairs works in tandem with the semi-official Prisoners Club,
established in 1994. The Ministry dispenses the salaries. The Club
functions as a vituperative advocate for the prisoners, and it is quite
14
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willing to publically needle Palestinian leadership, generally, and the

Ministry of Prisoners Mfairs, specifically, into providing ever greater
payments and benefits. The Ministry channels certain payments and
benefits through the Prisoners Club. 5
Terrorists' salaries have always totaled millions of dollars per
month. As far back as 1995, total monthly payments to all security prisoners exceeded $3 million per month. Beginning in 2002,
the monthly amount swelled to $9.6 million monthly-a 246 percent increase over the prior administration's payouts, according to
records of the PA Ministry of Finance. The rate of increase in prison
salaries grew at a far faster rate than the number of prisoners, stated
the PA Minister of Finance with an element of satisfaction. 6
Throughout the twenty-first century, the salaries continued to
consume millions of Palestinian budgetary dollars per month. In
addition to salaries, between 2002 and 2004, the PA paid more
than $6 million to the Prisoners Club to cover legal fees, Israeli
fines, and post-prison pensions. The Prisoners Club distributes its
cash subventions to Palestinians in Israeli prisons and jails via "canteen accounts" and other modalities. In addition, the PA defrays
the Prisoners Club's operating budget of more than S40,000 per
month?
Like any salary, payments to prisoners follow a sliding scale based
on "quality." In this world, the more heinous the act of terrorism,
the greater is the salary. In setting the salary level, the system allows
the Israelis themselves to judge just how bloodcurdling the crime
is. The more violent the terrorist act, the longer the Israeli prison
sentence, and in turn, the higher the monthly compensation. g
Under the official schedule of payments, detention for up to
three years fetches a salary of about 1,400 shekels, or almost $400
per month. Prisoners who have been incarcerated between three
and five years will be paid 2,000 shekels, or about $560 monthly-a
compensation level already higher than that for many ordinary West
Bank jobs. Those who have committed more serious acts and are
incarcerated for between five and ten years ~Nill be paid 4,000 shekels or more than $1,100 monthly. Sentences of ten to fifteen years
fetch salaries of 6,000 shekels, about $1,690 a month. Even greater
15
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acts of terrorism earning sentences between fifteen and twenty years

earn 7,000 shekels or almost $2,000. 9
Among the worst cases, where the terrorist receives a prison
term of between twenty and twenty-five years, the resulting compensation is 8,000 shekels or more than $2,250 monthly. The most
notorious terrorists imprisoned for between twenty-five and thirty
years receive 10,000 shekels monthly or more than $2,800 each
month. In this hierarchy of mass murder, the most bloodstained
offenders, receiving sentences of thirty years or more, are rewarded
\vith the top wage, 12,000 shekels per month, or almost $3,400
monthly-up to ten times the average pay earned by many working
Palestinians .10
Prisoner salaries and funding, through both the Ministry and
through the Prisoners Club, have always been a priority. During
periodic financial crunches, the PA would advance the Prisoners
Club funds before it cured the arrears in other social programs.
Nevertheless, sometimes the Prisoners Club was unsatisfied with the
pace of payments. On July 10,2004, the Prisoners Club delivered
two accusatory memos to Salam Fayyad, then the PA Finance Minister, entitled "Exceptional payment of the allotments of April and
May 2004" and "Exceptional payment of la\\yer fees for April and
May 2004," demanding additional funding despite what Fayyad
described as "our lack of resources." The letters accused Fayyad,
personally, of an "inability or unwillingness ... to understand the
resistance weight of the issue of prisoners." Fayyad rebuffed both
letters, sniping back in a speech, "yVe are facing a financial crisis, of
which everybody is aware, but there are those that choose not to
listen." Fayyad continued, "The Palestinian AuthOlity has always
positioned the issue of prisoners on the top of its list of priorities. "ll
Fayyad found the Prisoners Club attacks so vicious that he publicly declared, "The Ministry of Finance and I personally have been
subjected lately to a tyrannical and unjust campaign based on the
accusation by those that try to take advantage of the prisoners issue
[to claim] that the ministry is neglecting prisoners. "12
Nonetheless, just four days after the letters, the PA transmitted a special check of $175,000 to cover overdue Prisoners Club
16
191
expenses, and did so, "at a time 'when no ministry or PA institution

received a payment," as Fayyad bitterly complained. 13
The venomous nature of the public squabble in 2004 and the
accelerated millions of dollars spent on prisoners' salaries was, on its
face, just internecine politics. But it is also illustrative of the intense
public, social, and governmental importance of paying terrorist salaries-and on time.
Later that year, in December 2004, the PA went further, regularizing into law its custom of paying terrorists. Chapter 1 of the
Law of Prisoners, also known as Resolution 2004/19, narrowed
the definition of a salaried prisoner to "Anyone imprisoned in the
occupation's [Israel's] prisons as a result of his participation in the
struggle against the occupation."14 This definition separated those
considered national heroes, by virtue of their attacks, from common criminals. Otherwise, common thieves could earn high public
wages just for stealing from their neighbors.
In an interview, Ministry of Prisoners spokesman Amr Nasser
confirmed as much when he was asked to read aloud the definition
in English. Reading from the law, Nasser recited: "A detainee is each
and every person who is in an occupation prison based on his or her
participation in the resistance to occupation." This means crimes
against Israel or Israelis. On his own, Nasser added, "It does not
include common-law thieves and burglars. They are not included
and are not part of the mandate of the Ministry. "15
From time to time, special salary supplements have been
extended to qualified security prisoners. In 2009, a $150-per-prisoner bonus ,vas approved to mark the religious holiday of Eid alAdha. President Mahmoud Abbas also directed that an extra $190
"be added to the stipends given to Palestinians affiliated with PLO
factions in Israeli prisons this month."
Reporting on the additional emolument, the Palestinian news
service J.1da an explained, "Each PLO-affiliated prisoner [already]
receives [a special allocation of] $238 per month, plus an extra
$71 if they are married, and an extra $12 for each child. The stipend is paid by the Palestine Liberation Organization (PLO) each
month."16
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Supplemental to the generous salaries are many other financial, social, and honorary benefits to both the prisoner and his family. For example, in 2011, PA President Abbas bestowed a special
$2,000 gift on the family of Khaldoun Najib Samoudy, who was
shot to death by Israeli soldiers before he could detonate two pipe
bombs. In Palestinian society, special honors and financial tributes
are extended to the families of suicide bombers or those shot before
they can kill-that is, "martyrs. "17
As recently, as July 29,2013, the Palestinian Authority responded
with anger when an Israeli minister used the term "terrorists" in
referring to prisoners released as part of a 2013 deal to resume
face-to-face peace negotiations. "Terrorists are those who occupy
the lands of another people and displace them by force and settle
in their place," the PA Ministry of Foreign Affairs railed. "Palestinian prisoners are strugglers for their freedom and not terrorists."18
Beyond the adage "one man's terrorist is another man's freedom fighter," a penetrating reality is delivered to taxpayers in the
United States of America and Furope. These terrorists' salaries constitute enough monthly millions to consume behveen 4 and 6 percent of the Palestinian Authority'S annual budget, depending upon
the measuring stick. That money does not come from the Palestinian national economy but from donor countries paying billions in
financial aid to the Palestinian Authority.19 All money is fungible,
especially when the percentage of budget that the PA devotes to
prisoner salaries is often greater than those allotted for key social
welfare and educational programs and are prioritized as highly-visible, top-line expenditures.
In other words, taxpayers around the world are providing direct
financial support for terrorists' salaries. This concept is hardly a surprise to the Palestinian-monitoring community, leading members
of the media, or those who follow Palestinian diplo-economics. As
early as 2006, a major New York Times feature story, quoting a
deputy in the Ministry of Prisoners Affairs, almost casually mentioned that the ministry "normally spends $3 million to $4 million
a month to support prisoners and their families and to cover some
legal fees." The New York Times specified that the ministry "distrib-
18
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utes allowances averaging $340 a month to families whose breadwinners are in jail. "20
The Palestinian media has covered the topic routinely from
time to time. For example, the Palestinian news service Ma'an published at least two articles in 2009 detailing special supplemental
payments. 21
On February 9,2009, The Jerusalem Post ran a story headlined,
"PA Paying Salaries to Hamas Men in Israel's Prisons." The article
led, "The Palestinian Authority revealed on 'Wednesday that it was
paying monthly salaries to Hamas prisoners held in Israeli jails. Ziad
Abu Ein, deputy minister for prisoner affairs, said that for years, the
PA had been dealing with the prisoners 'professionally and ,vithout
political considerations.' ... According to Abu Ein, the Hamas ministry pays monthly salaries only to prisoners who are affiliated with
the Islamist movement."22
However, it was only in 2011 that the question of terrorist salafies leapt onto center stage. The watchdog known as Palestinian
Media Watch (PMW) began scrutinizing Al-Hayat AI-Jadida, the
official gazette of the Palestinian Authority, for prisoner salary references. PiVfW digested and translated into English a summary of
existing government regulations, resolutions, policies, and special
benefits enacted the previous year, which were summarized in Volume 90 of Al-Hayat Al-Jadida, published April 13, 2011. 23
Among the relevant decrees summarized was Government Resolution #19, issued in 2010, which stated, "A released prisoner will
be exempt from tuition fees at government schools and universities if he served a period of five years or more in prison. A released
female prisoner who served at least three years in prison will be
exempt from tuition fees at government schools and universities.
These prisoners are entitled to transfer the exemption to one of
their children, or to their spouse ... The Palestinian Authority is
committed to providing the opportunity for academic study for
prisoners in Israeli prisons, by covering all study expenses for all
stages of university study available to prisoners. A prisoner's children ",iJl be exempt from 80 percent of university tuition fees if
the prisoner was sentenced to at least nventy years and has been
19
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in prison for at least five years. Children of female prisoners ",ill be

exempt from 80 percent of university tuition fees if the prisoner was
sentenced to at least ten years, and has served at least three years. "24
Government Resolution #21, issued in 2010, declared, "Every
prisoner \"ill be paid a uniform sum linked to the cost of living
index, as a monthly expenditure. Additionally, every prisoner ,,,ill
be paid a uniform sum of 400 [Israeli] shekels for clothing. The
sum will be paid twice a year, and will be added to the prisoner's
salary."25
Government Resolution #23, issued in 2010, states, "Every
prisoner will be granted a monthly salary, to be paid to him or to
his family, on condition that he does not receive a salary from a [ different] governmental or semi-governmental body or official institution ... The salary will be paid to the prisoner from the date of his
arrest, and a special supplement \\ill be paid to prisoners from Jernsalem and from the Interior [Le., Israeli Arabs]; a spousal supplement will be paid, and a special supplement for children up to the
age of 18. "26
All references to terrorist salaries use the ~'\.rabic word "ratib,"
which means only one thing: "salary." The same word, ratib, is
used to describe the regular compensation granted civil servants
and other employees when discussed in official Palestinian budget
documents. 27
Palestinian ld~edia Watch's revelations triggered uproars in both
the British Parliament and the Norwegian Parliament.
The UK operates numerous financial assistance programs
designed to cover the PA's general budgetary needs. Hundreds of
millions of pounds have been advanced. Citing PM\V's disclosures,
British MP Robert Halfon wrote a letter of complaint to Britain's
Foreign Office and its Department for International Development
demanding answers to whether or not taxpayer money was being
utilized for terrorist salaries. International Development Minister
Alan Duncan denied that British taxpayers were defraying salaries
to terrOlists, claiming, "The PA operates two social assistance programs to provide welfare payments to households who have lost
their main bread,:vinner ... dependent spouses or children should
20
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not be held responsible for the crimes of family members, or forced

to live in poverty as a consequence. "28
Likewise, in N orway-a leading funder of the Palestinian budget-its Ministry of Foreign Affairs at first denied that terrorists
were actually getting salaries. 29
Continued coverage in major international media outlets kept
the topic alive. The Wall Street Journal and International Business
Tirnes, as well as London's Daily }Jail and Norway's govemmentowned NRK (also known Norwegian Broadcasting Corporation),
devoted penetrating coverage. In 2012, Israel's Channel 2 News,
followed by an article in The Times of Israel) stated that the PA
was expending 6 percent of its overall annual budget on terrorist
salaries.
"Despite the Palestinian Authority's financial hardships," led
The Times of Israel) "it spends tens of millions of shekels each month
paying salaries to prisoners held in Israeli jails for security offenses
and acts of terrorism against Israel-including mass murderers, and
last year Prime Minister Salam Fayyad tripled their monthly pay.
The PA also pays monthly stipends to the families of suicide bombers." The Times of Israel recap, September 3, 2012, also detailed
that, "As of May 2011, the PA spent NIS 18 million ($4.5 million)
per month on compensating Palestinian inmates in Israeli prisons
and a further NIS 26 million ($6.5 million) on payments to families of suicide bombers. In all, such payments cost the PA some 6
percent of its overall budget, Israel's Channel 2 News reported ...
citing documentation signed by Fayyad."30
Hence, terrorist salaries-defrayed by US, European, and Asian
taxpayer monies-have long been no secret at all.
In the United States, shortly after 9/11, it was becoming clear
that funding terrorist salaries through the Palestinian Authority was
a clear violation of American law. On September 23, 2001, President George \v. Bush issued an executive order prohibiting the
support of any organizations or individuals designated as terrorists.
By 2003, it became dear to more than a few that American taxpayer money was directly supporting Palestinian terrorists. Anumber of "vetting" mandates were initiated to government auditors.
21
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To many, these vetting mandates were almost cursory, based on a

mere statistical sample. 31
By 2005, several "vetting procedures" were written into the US
laws attached to various farms of budgetary financial assistance to
the Palestinian Authority and Gaza. The Government Accountability Office (GAO) was charged ,'lith the duty to investigate two key
avenues of that financial aid, the United States Agency for International Development, which channeled money into a spectrum
of programs, and also monies going to the UN Relief and 'Narks
Agency for Palestinian refugees, known as UNRWA. A GAO official explained that his agency "only audited USAID programs in
the "Vest Bank and Gaza and the State Department funding of
UNR'NA.. We did not look at any other funding of the US government to Palestinian or U~ entities. But what we looked at represents a large percentage of US monies." The GAO determined
the scope of the third-party "vetting" on what it examined, and
it discovered that "vetting involves checking the names of individuals and organizations that implement USAID projects against
databases and other information sources to determine if they are
involved with terrorism."32
A 2006 GAO investigation found that more needed to be done
to comply with requirements impacting hundreds of millions of
taxpayer dollars that continued to reach the Palestinian Authority directly through a cornucopia of programs. In the background
and repeatedly referenced in the 2006 report, were legislation and
regulations "prohibiting the support of terrorists, and clauses in
all prime awards prohibiting ... the use of US funds to recognize
or honor terrorists." Also covered was "the provision of cash to
the Palestinian Authority." The GAO's 2006 report was itself titled
"Recent Improvements Made, but USAID Should Do More to
Help Ensure Aid Is Not Provided for Terrorist Activities in 'Vest
Bank and Gaza." It called for greater scrutiny and vetting. 33
Ultimately, an elaborate maze-like organizational chart of vetting offices and procedures was salted across the State Department
and related offices in both 'Vashington and the Middle East. But
the GAO concluded, "The timing of the RIG [Regionallnspec-
22
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tor General] financial audits and certain other issues limited their
usefulness to the mission for determining whether awardees had
complied with the antiterrorism requirements." It added, "Until
recently, the mission's vetting of individuals associated with awardees was limited by the mission's decision not to collect certain identifYing information for key individuals."34
A fonow-up May 2009 GAO report was titled, "Measures
to Prevent Inadvertent Payments to Terrorists under Palestinian
Aid Programs Have Been Strengthened, but Some Weaknesses
Remain." The GAO's 2009 report explained, "The U.S. government is one of the largest donors to Palestinians. It provided nearly
$575 million in assistance in fiscal year 2008." Yet, the GAO found
incomplete compliance with even the minimal paperwork requirements for vetting procedures-in other words, the inclusion of textual vetting "clauses." In many cases, it seems, federal agencies and
offices merely went through the motions. "An estimated 17 percent
of sub-awards had insufficient evidence to assess compliance related
to mandatory clames," the GAO concluded. "For the remaining
sub-awards, an estimated 5 percent did not contain the mandatory
clauses at the time of the award. The GAO also found limitations
in the agency's monitoring of sub-awards for inclusion of mandatory clauses. "35
Most tellingly, the GAO confined itself to textual vetting clauses.
There is no mention in any GAO report of the Ministry of Prisoners
Affairs or the Prisoners Club, the two prime portals for millions in
dollars in monthly terrorist salaries. A GAO official explained that
his agency's inquiry was limited in its scope to monies involving
USAID and UNRWA-not the PA itself. Moreover, a GAO official
asserted, "Follmving the 2009 report, we were confident that the
agencies made the changes we asked them to make. As of2012, we
dosed our recommendations as implemented."36
The Consolidated Appropriations Act of 2010 contains a strict
anti-terrorist vetting requirement. In Section 7039(b), the law
states, "The obligation of funds appropriated by this Act under
the heading 'Economic Support Fund' for assistance for the West
Bank and Gaza, the Secretary of State shall take all appropriate steps
23
198
to ensure that such assistance is not provided to or through any

individual, private or government entity, or educational institution
that the Secretary knows or has reason to believe advocates, plans,
sponsors, engages in, or has engaged in, terrorist activity nor, with
respect to private entities or educational institutions, those that
have as a principal officer of the entity's governing board or governing board of trustees any individual that has been determined to
be involved in, or advocating terrorist activity or determined to be
a member of a designated foreign terrorist organization." In Subsection (c), Prohibition, the act clearly declares, "None of the funds
appropriated under ... this Act for assistance under the West Bank
and Gaza Program may be made available for the purpose of recognizing or othenvise honoring individuals who commit, or have
committed acts of terrorism."37
*****
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Standing astride the prodigious monies extended by Western

governments in the form of grants and aid packages are vast pools
of financing from the Arab world that find their way directly into
Palestinian Authority coffers, as well as into a spectrum of Palestinian NGOs and Israeli NGOs. A superhighway of money goes
directly from Israel's greatest adversaries into a vast interchange
where it comingles with dollars, shekels, Euros, and yen from the
finest financial nameplates and charitable funds in the world. This
merged money courses throughout Israel with exit ramps into some
of the most benevolent Arab programs-as well as those that stoke
violence and confrontation.
A central financial crossroads for Arab and Islamic money in
Israel is the Islamic Development Bank (IDB), headquartered in
Jeddah, Saudi Arabia. Established in December 1973, just after the
Yom Kippur ''Var, the multinational institution was created to foster
financial projects in accordance ,:vith Sharia Law, according to the
tenets of Islam. Membership of the bank is comprised of fifty-six
countries in the Organization of the Islamic Cooperation (OIC).
The driving member, Saudi Arabia, controls 23.61 percent, according to IDB records. The second highest share ownership is Libya's
24
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at 9.47 percent, followed by Iran \vith 8.28 percent. About half the
other owners hold less than one percent. 38 Most, but not all, of
the member states are avowed opponents of the Je\\rish State's very
existence.
A series of protracted Palestinian riots and related unrest ignited
in September 2000, collectively referred to as the Second Intifada
or AI-Aqsa Intifada. Intifada means uprising. In December 2000,
a few months after the onset of the riots, Arab ministers at a Cairo
summit agreed to "economic decisions ... to support the Intifada," according to the semi-official Saudi weekly Ain-al-Yaqem.
Two multimillion-dollar funds were created to support the resistance: the AI-Quds Intifada Fund and Al-Aqsa Fund "to assert
the comprehensive Arab support for the Palestinian people in face
of continuous Israeli aggression." Their purpose was to support
LVujahedcen-"freedom fighters"-and "martyrs," the term commonly given to suicide bombers. Dominant financial support for
the twin tlmds was advanced by the Saudis, who announced, "The
Kingdom ofSalldi Arabia [has] always maintained its support to the
Intifada." Initial contributions amounted to $40 million, chiefly
emanating from Saudi Arabia and the Gulf States. 39
The Islamic Development Bank in Jeddah was chosen to
administer and manage both the Al-Quds Intifada Fund and AlAqsa Fund. The Secretary General of the i\rab League said the total
amount collected for the two funds had reached $693 million, disclosing that "there were other financial donations from Arab businessmen' and these donations are apart from the tlmds' capitaL"
Some years later, an internal document from the Islamic Devdopment Bank stated, "Al-Qjtds Int~fada [Fund] aims at providing
assistance to the families of martyrs and wounded persons and to
provide health care and education services to their children. The
objective of [the] AI-Aqsa Fund is to finance projects aimed at preserving the Arab and Islamic identity of the City of Jerusalem and
to enable the Palestinian economy to build its capacity, stand on
its own against the Israeli onslaught, and gradually disengage from
Israeli economy. The capitals of Al-Quds Intifada Fund and Al-Aqsa
J:iund are $200 million and $800 million respectively."40
25
200
Explaining who the recipients were, a Saudi statement read,

"Financial assistance was disbursed to 28 families of the martyrs,
248 injured people," as wen as "232 families whose houses were
demolished by the Israeli occupying forces and 29 Palestinian charitable societies in charge of distributing food baskets to the needy
people." Saudi officials added later that the funds had benefited
"664 martyrs' families and 20 I of the POW's [prisoner] families."
The Islamic Development Bank reported that "these families receive
monthly allocations to ensure the minimum of their needs. "41
An Islamic Development Bank summary asserted that from
December 2000 to June 2006, "total contributions to the Fund
amounted to $609.4 million." That enormous sum covers all
needs, from endowment building to identity-fortifYing resistance
efforts such as construction to financing a range of confrontations
that span the gamut from ordinary riots to martyrdom. Monies
channeled to prisoners and the families of martyrs are disbursed
through both the Palestinian Liberation Organization and the Palestinian Authority's ministries, including its Ministry of Prisoners
Affairs. "Vhile those contributions were clearly Intifada funds, separate tranches of funding from the same Islamic Development Bank
were funneled into various charitable works via two major top line
Arab NGOs: The Wdfare Association and the NGO Development
Center. Both the 'Welfare Association and the NGO Development
Center also receive money directly and indirectly from the most
prestigious donors in the world, such as UNESCO', The British
Lottery, Ford Foundation, and many governmental units, often via
the 'iVdfare Association of the UK. 42
'iVelfare Association and NGO Development Center funding
also finds its way to several Israeli beneficiaries that are also funded
by the New Israel Fund. These include B'Tselem and Adalah. Ironically, some of the same Israel- based recipients who receive American
tax-subsidized grants from the New Israel Fund have been selected
for support by the most influential sovereign Arab and Islamic charitable organizations representing national treasuries committed to
erasing the existence of IsradY
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*****
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20 I
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It is clear that hundreds of millions of taxpayer dollars have

been used both legally and illegally to fund, honor, and salary convicted terrorists. Disgorgement, clawback, and recovery of illegal
taxpayer expenditures could deprive the Palestinian Authority of
billions. Moreover, to comply vvith long-standing law and receive
additional legal funding, the PA would need to de-constitute its
own l\1inistry of Prisoners and sever all connection to its semi -official Prisoners Club and any substitute, successor, surrogate, standin, shadow, or subvention-direct, indirect, or in effect. The whole
system from A to Z would have to end to be legitimate under a
complex of American laws. Then, when the smoke settled, it would
take years of investigation by the US State Department to unravel
how so many officials winked, nodded, and slept through so many
years of this funding.
To determine just how substantial were the terrorist salaries in
the bigger picture required an examination of scores of internal
audit documents, going back years, from the Palestinian Authority's Finance Ministry's monthly reports. Amid the melange of
shape-shifting numbers and month-to-month tallies that rose and
fell with various financial crises, shortages, and monetary infusions,
it was clear that the Ministry of Prisoners is among the PA's most
salient line items.
For example, in January 2012 alone, out of a Social Service
budget of $119 million, more than $8.7 million was allocated to
the Ministry of Prisoners; of that sum, according to Table 6A of
the review, $6.56 million was "transferred" to prisoners-hence
the overwhelming majority of the budgeted funds paid were not
for bureaucratic office expenditures, but for actual terrorist salaries.
All told, funding for the Ministry of Prisoners was about ten times
greater than the allocation for Ministry of Labor, and about half as
large as that for the Ministry of Social Mfairs.44 \iVith ups and dovvns
for financial peaks and valleys, those January 2012 numbers were
indicative.
A Palestinian Authority Minister of Information spokesperson
confirmed in a May 2013 interview, speaking English, "There has
been a great deal of talk about donor money to support terror-
27
202
ism by these salaries. The issue has been raised this year and last
year."45
Half- hearted investigations have not only percolated through
the US government. The issue has roiled in London, Oslo, and
other capitals where media reports and open Palestinian dedarations have some taxpayers beginning to reach an inescapable conclusion: some of their tax dollars at work end up as salaries in the
pockets of terrorists.
As a palliative, the Palestinian Authority recently began replacing the term ratib-Arabic for "salary"-vvith other words connoting "social welfare," asserting the recipients were actually prisoners'
\vives and children-not prisoners themselves. lYlinister of State
Alan Duncan, in a letter to Britain's Parliament, defended the PA's
program as just family welfare. Similarly, ~orwegian Foreign Minister Espen Barth Eide answered his parliament ",cith the explanation
that the PA payments were merely family welfare stipends. 46
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But further investigation revealed that the monies were in fact

not paid to t'lmilies but to the terrorists themselves and solely as
salaries. Nearly two thirds of the existing prisoners are unmarried
without children and not the head of households, according to a
Ministry of Prisoners summary reported by al-QJidsnewspaper January 3, 2010. "The Ministry of Prisoners' Affairs in Ramallah said
that there are 2,805 married prisoners, representing 37.4 percent of
the total number. There are 4,695 unmarried prisoners, representing 62.6 percent," reported al-Q!tds. Single and married prisoners
received the identical salary, according to regulationsY Hence, the
compensation is not based on family need, but strictly on the severity of sentence and the corresponding level of terror.
It is the prisoner who decides who shall receive and administer the salary on his behalf. The mechanism of payment involves
a wakil, that is, a power of attorney, aHo\\cing the prisoner complete authority over the salary. Regulation #18 is explicit. Paragraph 1 defines, "Authorized agent: The person who is authorized
to receive the salary in place of the prisoner. "48
The regulation adds in paragraph 5, "If the prisoner is married,
his ",cife \vill be his authorized agent," but the law provides personal-
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ized exemption language, specitying, "Unless the prisoner appoints

someone else instead of her." The text goes on, "If the prisoner is
not married, one of his parents \\rill be the authorized agent. The
prisoner determines which one of them or any other person [will be
the authorized agent], in the event of a dispute. Authorization of an
agent is done by an authorization of agent [form] issued by the Red
Cross, that is signed by the prisoner, or by a special authorization of
agent signed by him and approved by a lawyer of the Ministry [of
Prisoners Affairs] and by the General Administration for Legal Matters of the Ministry. It will be valid for use by the Ministry only for
the purpose of the salary." The word ratib was used throughout. 49
The Palestinian tax code specifies that prisoners will pay "income
taxes" and typical "income tax \\rithholding" because their PA monies are ordinary salary. June 19, 2011, Al-Hayat AI-]adida, the
Palestinian Authority's official gazette, reported "A meeting was
held between the Ministry of Prisoners Affairs and the Ministry
of Finance [wherein] several [financial] issues were clarified: The
["rithholding] tax applies to every citizen who receives income from
PA coffers; it is "rithin the framework of the Income Tax Act; and
begins with salaries over 2,400 shekels [about $674J per month.
The beginning rate is 5 percent for salaries over that amount, that
is, 2,400 shekels. The tax rate is graduated, reaching at most only
10 percent of prisoners' salaries. The Minister of Prisoners Affairs
said that the prisoners in the [Israeli] prisons and their families are
subject to the r"rithholding tax 1 law, and radded that 1 the salary
raise this year had been welcomed "rith great satisfaction among the
prisoners and their families." The word ratib was used throughout.
Most strikingly, Palestinian l1.1edia Watch discovered several
telling interviews, TV reports, and official statements that undercut
any attempt to mask the payments as anything but direct salary to
the terrorists themselves for use as they saw fit.
The first was a sort of "consumer help" journalistic investigation of the type one might see on television any evening. But this
one featured a leading Palestinian TV personality investigating the
case of a prisoner who, because of a personal dispute, had forsaken
his ".rife and children by not assigning her that highly-sought sal-
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ary via a power of attorney. With a tense movie score in the background, and produced in a dramatic "you are there" format, the
prisoner's vvife is depicted, her face pixilated, complaining of financial abandonment by her husband. He had assigned the power of
attorney for his salary to others, and she was now left to fend for
herself. "A year and a half ago, I went to the Ministry of Prisoners
Mfairs," the ,vife complains in the footage, adding "Their answer
was, 'Your husband transfers it to the person he wants. It's in his
power not to transtCr [it to you], and we can't do anything about
it.'" She added, "It's not just me, this is a problem that many of
the prisoners' ,vives and children suffer from-from the transfer of
his salary, the prisoner's salary." The word ratib) spoken by both
the forlorn v,rife and a senior Ministry of Prisoners official, can be
distinctly understood in the video, even by non-Arabic speakers.50
In a second TV interview in March 2012, a Palestinian on-air
host conducted a telephone interview\\rith a disgruntled ex-prisoner
shortly after his release as part of the Gilad Shalit prisoner ransom.
Iyad Abu Khaizaran spent twenty-two years in an Israeli prison after
stabbing to death a 76-year-old Tel Aviv man. His complaint was
that his salary dropped by half once he was released. An agitated
Iyad protested on air on behalf of himself and his cohorts. "Since
the day we were released from prison," Iyad complains, "we were
given [only] half a salary ... We killed Jews. I personally killed Jews.
I killed settlers, and I injured soldiers. My house was destroyed. I
have eleven bullets in my body. I served twenty-two years in Israeli
prisons. The PA, which presents itself as responsible for the nation,
must be faithful to everyone." The TV host sympathetically presses,
"You, like the other [prisoners], did you receive salaries in the prisons?" Iyad replies, "Yes." After a further exchange to determine the
terrorist's rightful compensation regardless of organizational affiliation, the host recaps, "In other words, from two thousand, I mean,
all the organizations, without exception, whether it was Fatah or
Hamas, supporters of Abbas or not supporters of Abbas, they all
received salaries-or not?" Iyad answered, "Yes, yes they did."51
In December 2012, when the Palestinian Authority tried to
substitute social welfare terms for ratib, the term for salary, both
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Minister of Prisoners Mfairs Issa Karake and Prisoners Club chairman Qadura Fares took umbrage. They rebuked the verbal diminution of their constituency-that is, the prisoners. "[Minister of
Prisoners Affairs Issa] Karake denies rumors about changing salaries [rawatib, the Arabic plural for salaries is used,] into social assistance," reported WAFA, the official Palestinian Authority news
agency on December 27,2012. Karake added that the PA had recogniz;ed that "the prisoners' cause is central, and has authoriz;ed
regulations to support and protect them out of esteem for their
sacrifice and struggle."
At the same time, Prisoners' Club Chairman Fares, commenting to the al-Quds Internet edition, insisted on using the term
ratib, when describing a new version of the law "which considers payments made to prisoners as salary to which no other term
applies. "52
A few days later, vVattan TV aired another interview with
Karake. The TV host posited, "You speak of a permanent salary for
every [released] prisoner who was in prison for more than five years,
and he gets his salary while he sits at home. Some of them are in the
prime of their lives and could get a job and work. Why not use him
in the workforce and give him a salary?"
Karake replies, "That's right. I presented it to the government
and we decided to give preference to employ these prisoners ... in
order to make the prisoner into a productive person."
The host replied, "Do we have the number of prisoners who
get full monthly salaries?"
Karake answered, "About 4,000."
To this, the host quips, "That's an army."
Karake conceded, "Yes, that's a big number, and it's grovving."
Almost incredulous, the host responded, "They don't work.
They just collect a salary."
Karake qualified, "Some work."
But the host retorted, "A small number."
To this, Karake rejoined, "Some volunteer and work in different institutions. "53
In an interview, 1 asked Prisoners Club chairman Qares what
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type of employment training was being provided to ex-prisoners

"beyond salary."
Qares replied, "Beyond salary? We have a special garage for auto
repair training, plus a college, Shahid Abu Jihad Martyr College in
Ramallah, ,vith some branches in Tulkarm, Nablus, and J enin. The
ex-prisoners learn graphic design, electricity and, as I say, car repair,
and we help with job placement. \Ve are an NGO-but not really.
We receive government funding for our Legal Unit-it's twentyeight lawyers in ten West Bank offices. But we need much more
money to help our prisoners and ex-prisoners. "54
Eventually, it became clear to some officials in Europe that the
Palestinian Authority was being disingenuous in its responses and
denials. They concluded that European tax donars were, in fact, paying terrorist salaries. In March 2013, Norwegian Foreign Minister Eide was compelled to admit to NRK TV that his office was
misinformed by the Palestinian Authority. Eide stated, "The insufficient information [we] first received [from the PAJ; I think that is
very unfortunate." NRK was among those that originally demanded
answers from the Foreign Ministry following the Palestinian Media
Watch revelations. NRK's March 21, 2013, report stated, "At first,
the Foreign Ministry denied such a program exists. But after checking with Palestine, it all looks somewhat different." On camera, Eide
admits, "I certainly have not had documented that it [the money]
doesn't go to people who have been convicted of terror, and information has been given that those who are rimprisonedl for many
years receive more money than those [imprisoned forJ less. That is
precisely why we, along 'N'ith the UK, have asked [the PA] for even
more detailed information in a letter ,ve recently sent the PA. "55
On March 19,2103, Eide transmitted an updated statement to
the Norwegian Parliament: "Norway and the UK agreed on drawing up a joint Norwegian-British letter to the Palestinian Authority (PA) with a series of detailed questions about the [support]
program [for prisoners]. This letter has been delivered to the PA
today." He added, "I have brought up the matter directly with
Prime Minister Fayyad." Eide credited Palestinian Media Watch for
the information. 56
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Palestinian officials reacted \vith defiance to any effort to end

the salaries. "Deputy Minister of Prisoners Affairs Ziyad Abu Ein
declared to satellite TV network Hona i\l-Quds: 'If the financial
assistance and support to the PA are stopped, the [payment] of salaries (Rawatib) and allowances Clvfukhassasat) to Palestinian prisoners will not be stopped, whatever the cost may be. The prisoners are
our joy. We vvill sacrifice everything for them and continue to provide for their families."57
The demand by European and other nations to spend their billions on peaceful projects and not terrorist salaries has been derisively dubbed" donor filth" by some in the Palestinian intelligentsia.
In a telling March 7, 2013, Palestinian TV interview about cultural
matters, Abd l\l-Fattah Abu Srour, N-Rovvwad Theater Director
and Head of the Palestinian Actors' Union, stated, "The theater's
purpose is not to be diplomatic and not to make peace between
the nations ... And not to accept donors' dictates for projects and
programs that have nothing to do with us or with our Palestinian
nation's priorities."
The TV host responded, "I ask you: 'The donor's filth'-in
quotation marks or without quotation marks-how has it affected
our theater and culture in Palestine?"
Abu Srour answered, "Unfortunately it has affected many institutions, not only the theater. It has affected many cultural institutions-with agendas and projects that have nothing to do with us.
The EU works a lot on normalization projects," adding, "under the
name of 'peace."'58
The culture that lionizes terrorists w'ith substantial public
salaries, pensions, public-square and baby namings, and triumphant receptions upon their release is fortified by the expectation
that eventually their men will come home-to a hero's welcome.
Indeed, prisoners are diplo-economic currency. J\lany PalestinianIsraeli diplomatic efforts include a release of prisoners as a bargaining chip. For example, the 1994 Agreement on Gaza Strip and
Jericho Area included, in Article 10, this stipulation: "Upon the
signing of this Agreement, Israel w-ill release, or turn over, to the
Palestinian Authority vvithin a period of 5 weeks, about 5,000 Pal-
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estinian detainees and prisoners, residents of the "Vest Bank and

the Gaza Strip. Those released will be free to return to their homes
anywhere in the "Vest Bank or the Gaza Strip. Prisoners turned over
to the Palestinian Authority shall be obliged to remain in the Gaza
Strip or the Jericho Area for the remainder of their sentence. "39
The 1999 Sharm el-Sheikh Memorandum stated, "The Government of Israel shall release Palestinian and other prisoners who
committed their offences prior to September 13, 1993, and were
arrested prior to May 4,1994. The Joint Committee shall agree on
the names of those who will be released in the first two stages ...
The first stage of release of prisoners shall ... consist of200 prisoners. The second stage ... shall consist of 150 prisoners."60
In 2011, the ransom for kidnapped IDF soldier Gilad Shalit
required the release of 1,027 terrorists, including numerous murderers of innocent civilians. In 2013, Israel agreed to Palestinian
demands to release 104 security prisoners, many with "blood on
their hands," in exchange for a resumption of peace talks. The
credentials of the released killers ran the dreadful gamut: an axe
to the head; a knife in the back; an lED by the road; a Molotov
cocktail into a bus; a rope around the neck; a beating with a hoe; a
stabbing with pruning shears-mostly civilians, many children or
elderly. For victim families, this periodic political reward heightens their grief forever. Disconsolate family protests are held in
Israel's public squares and posted to the Internet-but to no avail
in the face of a cabinet decision, albeit a painful one, that comes
with regularity.61
The Israeli government and society are left ,vith the stark, visceral reality that the Palestinians seem to value prisoners as much if
not more than peace and ,vill only negotiate the latter in exchange
for the former. AU this means that becoming a terrorist offers a
good wage sponsored by foreign-country taxes, plus a nice pension,
good family benefits, local celebrity, and the seemingly sure prospect of early release to a local fireworks reception as soon as politics
make it "their turn." In this way, every new terrorist act disrupts the
peace and, therefore, makes it more likely that a political release is
in the offing-like a down payment on release for the previous man.
34
209
Paying it forward or paying it backward, the system depends upon

ample outside funding from Western governments.
Every assassination, ambush, arson, or attack is a national tragedy for Israel. The news of each incident noisily topples through
Israeli society like so many precarious, protective dominoes thudding. In bad times, terrorist acts can happen daily. In less bad times,
they blister through the backdrop only occasionally. During 2013,
a series of bridges and blockades, well-built high walls and wellconstructed good wills, economic success and technologic security
have all combined to make the random killings much less frequent.
Easy to believe it doesn't happen much. When I was in Jerusalem
in spring 2013, such an incident had not happened for almost eighteen months. To the casual observer, it can seem like just a litany of
honible headlines from the awful distant past.
*****
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Evyatar Borovsky, 31, was a clown at heart. Big heart. In his

pocket, he always carried two puppet eyes. Just slip them on the
fingers, and make a child laugh. Especially a child too hurt to smile
and too traumatized to see the sun through his or her own darkness. Nicknamed Napo, Evyatar was a therapeutic clown. His mission was to inject careful syringes of humor and comic diversion
into those who needed it most-the children. He was known everywhere for the lustrous smile he always brought into the room. His
five kids adored him. How about a funny daddy? Evyatar's face
would burst into a goofY grimace. Evyatar's father always expected
the joke from his 50n. 62
Tulkarm is a Palestinian city of an estimated 60,000 residents
nestled in the hills not far from the Mediterranean, about an hour
northwest of Jerusalem. The town traces its history to the Canaanite period and also enjoys Roman, Crusader, and Ottoman traditions. Today, the city-which hosts the 'Vest Bank's second-largest
refugee camp-is considered a flashpoint.63 Many residents are
eager to work in the robust Israeli economy. But others are devoted
to intense militancy.
Shuka is a village near Tulkarm. The Zaghal family, an impov-
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erished Arab family in Shuka, had been "shamed" because a son,

Abdulfattah, had been convicted by Palestinians of spying for Israel
and jailed. Among Palestinians, "collaboration" with the Zionists
is considered the lowest of crimes. After a year in jail, Palestinian
authorities, as a humanitarian gesture, paroled Abdul'lttah back to
his poverty-gripped family so he could help the household. But the
stigma of being an Israeli spy came ,vith him. Abdulfattah's twentyone-year-old brother, Salam, would make a very different mark for
the family. Once, he tried to plant a bomb. That landed Salam in
an Israeli prison for more than three years. Salam had been released
just a few months earlier. But now he had no job and no economic
prospects. Abdulfattah remembered that his brother increasingly
began "talking more and more about the martyrdom of the prisoners in Israeli jails."64
April 30, 2013, shortly after dawn, Salam Zaghal jumped onto
a bus for the long drive to Tapuach Junction. He carried a blue
plastic bag. Two items were secreted inside the bag. 65
Tapuach Junction is a major highway crossroads about twentyseven miles, or about an hour by car, from Jerusalem. The Book
of Joshua in 12:17 cites Tapuach and its King as among the first
encountered by the ancient Israelites. More than just a crossroads,
Tapuach is an important hitchhiking nexus for Arabs and Jews,
Israelis and Palestinians, those from the settlements and those from
the Arab villages. As such, this simple stretch of nondescript roadway is ordinarily a perfect corridor of coexistence. It is a place where
Palestinian day laborers and ordinary employees from the 'Vest
Bank, high tech Israeli technocrats and office workers, all gather
to grab a ride. 66 The junction is also good for a medical clown who
needs to catch a lift.
On April 30, 2013, the man ,vith a big heart, Evyatar, was waiting like many others for a ride. As usual, the Palestinians assembled in one spot, and the Israelis assembled in another, all trying to
thumb their rides. Recently, the security checkpoint, about thirty
paces from where Evyatar was standing, had been removed in an
effort to normalize life. It was shortly after eight in the morning. 67
Neither Evyatar nor Salam had ever met. But soon they would.
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Zaghal asked to be dropped about sixty meters down the way

from the intersection. '-"'hen he stepped off the bus, he lit a cigarette. Then Zaghal texted his brother Abdulfattah. "My dear
brother, take care of dad, mom and my sister, and keep your head
up." Zaghal sent a second text to his family: "Forgive me in life, in
death, and in the end of days." Then he broke his phone so no one
would call back and dissuade him.68
lviorning was now everywhere. It was 8:15 a.m., and the sun had
emerged over the hills. Evyatar was standing about, looking somewhere over there, oblivious to the nearby Arab hitchhikers congregated about in gaggles. Zaghal approached, carrying his blue plastic
bag, which contained novo items: a piece of paper-a prosecution
notice from a previous run-in "vith Israeli security, and the other
thing. Zaghal reached in for the other thing. It was a kitchen knife
almost eight inches long. Suddenly, he screamed, "Allahu Akbar!"
and "There is no God but Allah and Muhammad is his messenger."
Salam positioned himself directly in front of Evyatar and plunged
the metal blade directly into Evyatar's stomach and then again deep
into his chest. A moment later, the clown with a big heart lay on
the ground, his life leaking quiddy onto the asphalt. Salam then
grabbed Evyatar's gun, but before he could inflict more carnage,
nearby Border Guards shot him. The killer was not shot in the head
or upper body, but in the leg. In an instant, Evyatar-the down
with the big heart-was gone, stabbed to death. As for Salam, he
was rushed to an Israeli hospital with a non-life-threatening leg
wound. There, Salam received Israel's world-renowned medical
attention. 69
Some moments later, in Jerusalem, I received a text on my
Israeli phone. I ignored it. But I noticed several others in the hotel
lobby suddenly look down at their phones. So I also glanced at my
text. Then, I received a phone call as did others throughout Israel.
People I was meeting "vith that very hour knew Evyatar's family;
their kids played together. In Israel, everyone seems to know everyone or someone dose to someone until it becomes cperyone.
Quickly, the Zaghal family expressed joy at their son's act. Surrounded by a circle of comforting Shuka villagers, Salam's elderly
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father Assad, declared, "It was destiny, and we take plide in him as a
family. ~'hat he [Salam] did is a duty for all Palestinians living "ith
the aggression of the army and settlers. "70
Responsibility was immediately broadcast by the al-Aqsa Martyrs' Brigades, the militant "ring of President Abbas's Fatah party.
"VVith dignity, honor, and profound respect," the statement proclaimed, "the al-Aqsa Brigades in Palestine declares its full responsibility for the killing of the settler in the heroic operation ... this
morning carried out by the liberated prisoner-the hero, Salam
Assad Zaghal." The proclamation added that such "quality operations" were "a gift to all prisoners in the occupation prisons." \Vhen
the Palestinian news media carried news of the killing, Palestinian readers rejoiced, regaling the comment section 'Arith such snippets as, "May each illegal settler thief meet his end this way. FREE
PALESTINE!"71
Salam was also promptly exalted on Fatah's Facebook page.
"The youth Salam al-Zaghal, who stabbed the settler at the alZa'atara [Tapuach] military checkpoint, comes from the village of
Shuka, located in the Tulkarm District. He is a released prisoner
who sat in the occupation's prisons for four years. Peace be upon
you, on the day of your birth, and upon the day of your arrest and
on the day you 'Arill go free."72
Meanwhile, the Borovsky family raced the sunset, as Je"ish
law requires. Evyatar's body was rushed back to his village near
Haifa in the north for the emotional burial. Hundreds of Israelis
crowded the graveside. Wrapped in a shroud, surrounded by family and friends, and many who probably did not even know him,
Evyatar with the big heart- stabbed to death-was carried to his
final resting place. A friend haplessly brought the extra finger eyes
which had just arrived from America; Evyatar had been planning to
do more finger puppetry. Evyatar's father spoke with incredulity,
"I can't believe that I'm here. Surely tonight you'll get up-you'll
laugh and say, 'I fooled you.' That's what you always did, made
everyone happy." n
Evyatar's 'Aridow, Tzovia, bent over her husband in lamentation waving five fingers. "}'ive orphans he left behind: Eve orphans!
38
213
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Five orphans!" she cried, as wailing from other women fortified her
anguish, and the men's bleak faces tried to remain tough and taut.
A woman gripped her face with her left hand as the pain reached
the surface. One of Evyatar's five young boys rested his head upon
his father's enshrouded chest. His ear was down on the chest, but
no sound came?4
Later, in a court hearing, Tzovia said of her husband's killer,
"It is really useless to put him in jail, when one takes into account
that he 'NiH be released in one swap or another, and will use his
time there for academic studies free of charge, and the high standard of living that the state ofIsrael gives the murderers of its citizens. The continued court proceedings and jailing of the murderer
until the next release of murderers, which will take place sooner or
later, creates a false impression of justice, when the reality is that of
a circus. "75
One man with a big heart is gone. One man \vith a big knife is
in prison. For the medical clown, writers will write, children and the
'widow will remember, engraved plaques will be laid. For the killer,
his-and his family's-money problems are over. One moment he
was penniless \vithout a job. Now he enjoys one of the best salaries
in the land. His salary is assured, based on a seemingly endless supply of cash. Those who fund his salary are not nearby-they are in
the United States, Great Britain, Norway, and other nations.
"\Then one asks who is financing the flames, the stunning answer
can be seen with crystal clarity. It is us.
39
Mr. POE. Thank you, Mr. Black. You got a lot in in 5 minutes.
Dr. Pollock.
STATEMENT OF DAVID POLLOCK, PH.D., KAUFMAN FELLOW,
THE WASHINGTON INSTITUTE FOR NEAR EAST POLICY
Mr. POLLOCK. Thank you very much, Mr. Chairman, honorable

members, for inviting me to testify to you today. It is an honor for
me to be here and I think important to discuss the timely and important topic of European attempts to boycott Israel.
Prime Minister Netanyahu spoke just yesterday at AIPAC at
length about the BDS movement and I would like to begin with
some facts and figures.
The boycott threat against Israel right now is much more potential than real. Israels economy continues to thrive, estimated to be
growing in the range of 3 percent annually, in large part because
of its continuing ability to export and to attract foreign investment.
This includes trade and investment to and from the European
Union, which remains Israels single largest trading partner, with
the U.S. close behind.
Just to put this Israeli economy in global and U.S. perspective,
it is worth noting that despite its relatively small size the health
of Israels economy is also in our own economic interest.
The high-tech partnerships between Israel and the United States
are well known. But it may surprise you to hear that over the last
decade Israel has been a larger market for U.S. exports than oilrich Saudi Arabia.
Or that at times during this past decade Israel was one of the
top 20 foreign direct investors in the American economy or that
Israeli companies, products and licensed technologies are directly
responsible for tens of thousands of decent jobs for American workers right here at home.
As for current European policies, it is important to note that no
European government supports any type of boycott against Israel
today. When it comes to Israeli settlements or economic or other
institutions beyond Israels 1967 de facto borders, however, official
European practice diverges.
For example, the Horizon 2020 agreement between the EU and
Israel signed late last year predicates that the EU will not fund research or related activities in Israeli settlements, and at the level
of EU governments the EU has advised its members that they may
require, and several of the major European countries do require,
special labels for Israeli products manufactured in the settlements
across the 1967 de facto borders.
At the level of the private sector or quasi government economic
entities, some European institutions have announced divestment or
selective boycotts of Israel and some of those were mentioned by
some of you in your remarks just a few minutes ago.
But on closer examination, most of these moves turn out to be
either restatements of previous positions or very minor in economic
impact. Moreover, these steps have been offset by other more positive new decisions by European governments and by European
companies.
A few weeks ago, I had the privilege of testifying about this issue
in Europe to the Senate Foreign Relations and National Defense
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40
Committee of the French Parliament and I would like very briefly
to mention a few points that came up in that discussion.
First of all, I noted that the Palestinian President himself,
Mahmoud Abbas, when asked recently about boycotts against
Israel, said publicly in Arabic that the PA opposes boycotts against
Israel.
Unfortunately, however, as is the case with many issues, other
official Palestinian spokesmen have refuted that very statement.
For example, Hanan Ashrawi, recently in an op-ed in an Israeli
newspaper, wrote that boycotts against Israel are, as she put it,
the Palestinian nonviolent resistance.
But when I told the French Senate that President Abbas of Palestine opposes boycotts against Israel and I asked him why then
do you in Europe in some cases support boycotts against Israel,
they had no good answer.
I believe that this is the kind of approach that the United States
can also take, raising this issue very publicly as you are doing
today, considering whether there might be legislative or other legal
remedies against boycotts against Israel, as we do, for example, in
refusing to allow American companies to enforce the Arab boycott
against Israel. These are measures that could very well we considered and that could nip this problem in the bud.
Thank you again for the opportunity to address you and I look
forward to your questions and discussion.
[The prepared statement of Mr. Pollock follows:]
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41
Prepared Statement of Dr. David Pollock
Kaufman Fellow, The Washington Institute for Near East Policy
House Committee of Foreign Affairs
Hearing on 'Threats to Israel: Terrorist Funding and Trade Boycotts"
March 5, 2014
Thank you, Mr. Chairman. It is an honor for me to be here with you today, and I
thank you for the opportunity to testify about this important and timely topic.
The issue of European trade and other boycotts against Israel has been much in the
news lately - and only partly because of the recent controversy over the British
charity Oxfam, the Israeli company Soda Stream, and the American actress and
Super Bowl ad star Scarlett Johansson. Today, of course, that episode, and the larger
issue it symbolizes, is entirely eclipsed by the tragic reports from Ukraine, and from
other hotspots around the globe. Yet anyone who cares about the U.S. national
interest in the Middle East, and about the future of the U.S. alliance with Israel,
should not lose sight of ongoing trends that could potentially threaten the economic
underpinning of Israel's security - and with it the possibility of a stable and secure
peace between Israel and its neighbors.
Allow me to begin this discussion with some facts and figures. The boycott threat
against Israel right now is much more potential than real. Israel's economy
continues to thrive, estimated to grow in the range of 3 percent annually this year
and last, in large part because of its continuing ability to export and to attract
foreign investment. This includes trade and investment to and from the European
Union, which remains Israel's single largest trading partner, with the U.S. close
behind.
Israel's total trade with each of those major partners is on the order of almost 40
billion dollars every year, equivalent in each instance to just over one-third of
Israel's total exports. Overall, Israel's exports account for nearly 40 percent of its
GOP. This is in the context of an Israeli economy with total annual GOP of nearly
300 billion dollars, and a population of just over 8 million citizens.
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Just to put this Israeli economy in global and U.S. perspective, it is worth noting that
despite its relatively small size, the health of Israel's economy is also in our own
economic interest. The hi-tech partnerships between leading Israeli and American
companies in IT, telecom, cybersecurity, medicine, green tech, and other fields are
increasingly well known. But it may surprise you to hear that over the last decade,
Israel has been a larger market for U.S. exports than oil-rich Saudi Arabia. Or that at
times during this decade, Israel was one of the top twenty foreign direct investors in
the United States. Or that Israeli companies, products, and licensed technologies are
directly responsible for tens ofthousands of decent jobs for American workers right
here at home.
42
As for current European policies, it is important to note that no European

government supports any type of boycott against Israel. The EU continues to grant
Israel "privileged neighbor" status, which confers certain economic, regulatory, and
other benefits. Talks about a further upgrade have been delayed; but the EU has
proposed that ifthe Israeli-Palestinian peace talks succeed, it will offer both sides
significant economic advantages, including "special privileged partner" status for
Israel. As the French ambassador to Israel recently wrote, this offer "still stands,
despite the Israeli government's resounding silence."
When it comes to Israeli settlements or economic and other institutions beyond
Israel's 1967 de facto borders, however, official European practice diverges, at least
to some extent. The EU has advised members that they may require labels to
identify products from those areas, which may then not be eligible for certain trade
preferences (and may also be subject to voluntary consumer boycotts). The British
government officially notifies its companies that they may face "reputational
damage" from dealings with the Occupied Territories, though it opposes boycotts
against Israel as a whole. Or, as German Chancellor Angela Merkel put it on her visit
to Israel last week: "We do not support the demands for a boycott. This is not an
option for Germany. We have certain rules for labeling and we have to adhere to
those rules, but we do not believe in boycotts."
More concretely, in the Horizon 2020 agreement between the EU and Israel signed
late last year, the two sides reached a compromise deal that the EU would not fund
research or related activities in Israeli settlements. This agreement has provided
Israeli institutions with around one billion dollars in such funding over the past
decade. Depending upon the exact interpretation and application ofthe new
wording, it is expected to have very little practical effect in restricting any planned
projects. Nevertheless, it represents official EU - and also Israeli governmentrecognition of a distinction between economic cooperation inside vs. outside the old
1967 "Green Line" de facto border.
At the level of the private sector or of certain quasi-government economic entities,
however, some institutions in several European countries have recently moved to
limit their dealings with selected Israeli business partners -- not just with Israeli
settlements. This is particularly evident in some ofthe smaller European countries,
in Scandinavia or the Netherlands. For example, in January, the large Norwegian
sovereign wealth fund announced a blacklist of two Israeli firms because of their
alleged involvement in "the construction of settlements in East Jerusalem." A major
Dutch pension fund, PGGM, divested from five leading Israeli banks on similar
grounds, shortly after the Dutch water mogul Vitens stopped dealing with Israel's
national water company Mekorot.
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But on closer examination, most of these moves turn out to be either mere
restatements oflongstanding practices, or steps with very minor real-world impact
43
-- and usually both. Other cases follow this pattern. Germany's Deutsche Bank,
Sweden's Nordea Bank, and Denmark's Danske Bank have each put certain Israeli
financial holdings under review or restriction lately; but only in the most narrowly
limited sense, for specific small clients or for prospective accounts.
Moreover, these steps have been offset by other, more positive new decisions. For
example, the largest Dutch pension fund, ABP, decided after review to maintain its
exposure in Israel. A high British court decided that a boycott of Israel's "Aha va"
["Love"] beauty products is not supported by international law, whether or not they
are produced in the West Bank. Tourism from northern Europe to Israel is down
significantly, but increased tourism from other countries more than makes up the
difference. And while Irish diplomats privately rail against Israeli occupation, the
Irish firm Covidien recently paid nearly a billion dollars to acquire the Israeli
cutting-edge medical innovator, Given Imaging.
Alongside such still minor economic fluctuations are some even more minor
symbolic measures. Some British unions, academic institutes, or individual
celebrities like the scientist Stephen Hawking or the rock star Roger Waters have
declared boycotts against various Israeli institutions or events. Some organizations
in other European countries have followed suit. The latest announcement, just last
weekend, came from the Norwegian YMCA, which proclaimed its own boycott
against Israel.
These gestures often rate front-page coverage in the Israeli press, as do countermoves by other celebrities or pro-Israel organizations. Their economic or even
psychological impact, however, is very limited. Nevertheless, if such symbolic
sanctions gain momentum, especially in the absence of a countervailing campaign,
they could conceivably do real economic damage, while increasing Israel's sense of
isolation.
In that case, I believe, based on Israeli reactions to date, that the policy implications
for the Israeli government would be very mixed. Those Israeli Cabinet ministers
who advocate a more flexible policy on the peace process, such as Yair Lapid and
Tzipi Livni, have recently pointed to the threat of boycotts, and the economic
benefits of peace, as extra incentives for Israel to push that process forward. Others,
such as Naftali Benett and Moshe Ya'alon, say that Israel must resist boycotts or
even talk about boycotts, and focus on security or national rights instead.
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Prime Minister Netanyahu appears to be taking a middle ground, most recently

asserting, I believe with some reason, that Israel's intrinsic hi-tech economic
prowess and global value-added would insulate it against politically motivated
boycotts. His visit to Silicon Valley this week is in line with this overall approach.
This will probably play well here in the U.S., but I have my doubts about future
European reactions.
44
Allow me therefore to conclude with some personal observations from two weeks of
recent discussions with European officials and experts about this issue. A few
weeks ago, I had the privilege of testifying about these issues to the full French
Senate Foreign Relations and National Defense Committee, in Paris. I was asked
many questions about boycotts and sanctions against Israel, in the context of Israeli
settlement activity in the West Bank.
I will take the liberty of referencing a few points from those exchanges that are
directly relevant to today's hearing, and then note the reactions I encountered -which were fairly typical of those in other European capitals.
On the issue of boycotts, I pointed out that PA President Abbas himself said, on the
occasion of the Nelson Mandela memorial service in South Africa - and in Arabic, to
the TV channel al-Arabiyya - that he does not support a boycott against Israel.
Rather, he asserted, he is seeking to negotiate with Israel. I observed that this is
both remarkable and paradoxical to witness, even as in Europe one finds
movements promoting just such a boycott.
Asked about the precise Palestinian position, I explained that while the Palestinians
do not officially support boycotts against Israel, they do support boycotts against
products from the Israeli settlements. This may be understandable, yet in a certain
sense it does not promote peace. In a state of peace, it will be necessary to live
together. Instead, this tactic could lead to a condition of fear, of anxiety, and of
resistance to compromise. That does not serve the interests of the Palestinians
themselves.
So in Europe, I argued, the movement that supports a boycott against Israel is
illogical and absurd. One should rather encourage the two parties to reach out to
each other. Unfortunately, some Palestinian officials are exploiting this issue with
the same kind of double-talk some use about other aspects of the peace process.
While Abbas says he opposes anti-Israel boycotts, Hanan Ashrawi, a prominent
member ofthe PLO Executive Committee, published an op-ed an Israeli newspaper
just a few weeks ago with this headline: "The boycott is our Palestinian non-violent
resistance. "
What was the French Senate committee's reaction to this message? I believe their
reactions differed. Among the most vocal participants in this exchange, for example,
was one Senator who identified himself as the president of the Franco-Palestinian
Friendship Society. But he was quite cordial and thoughtful in discussing the
problem; and many of his colleagues voiced interest and appreciation for a different
and more balanced perspective on this issue.
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In practice, French government policy clearly opposes trade or other boycotts

against Israel. And in my subsequent conversation with one of President Hollande's
senior advisors, I found much common ground on the general principle that
pressure on just one side of the Israeli-Palestinian conflict would be counter-
45
productive. The Palestinian Authority has much room for improvement in its own
positions and behavior. It should not be encouraged to think that outside pressure
on Israel would relieve it of the need to compromise, for the sake both of peace and
of its own political aspirations.
At the same time, one should note an obscure recent statement by the EU
Ambassador to Israel, Lars Faaborg-Andersen, which is worth quoting in some
detail:
"If the talks are wrecked as a result of an Israeli settlement announcement, then the
blame will be put squarely on Israel's doorstep .... Israel will find itself increasingly
isolated, nor necessarily because of any decisions taken at a government level, but
because of decisions taken by a myriad of private economic actor, be it companies,
be it pension funds, be it consumers who will be choosing other product on the
supermarket shelves."
I believe this is a roughly accurate reflection of prevailing European policy and
sentiment, especially in the speaker's Nordic home environment. The economic
implications would be quite serious, though still probably manageable, if official
sanctions were applied. That appears highly unlikely, the more so since an EU
consensus would be required. Yet the prospect of growing unofficial economic
reprisals against Israel, in case of a breakdown in the peace process, is a real one.
What can the u.s. do to address this problem, and nip it in the bud? First of all, I
greatly appreciate the contribution of today's hearing in raising awareness about
the problem. Second, there is probably much that could be done in the realm of
reasoned discussion with our European allies and counterparts, in both public
diplomacy and private persuasion. The State Department has tried to clarify
Secretary Kerry's earlier comments by noting that the u.S. opposes boycotts against
Israel, and further such statements would be very welcome. Third, legislative or
legal remedies may be available as well. As a possible analogy, I believe u.S. law
penalizes attempts to comply with the nominal Arab boycott against Israel -- which
is by now largely ineffective as a result. And U.S. law and policy impose costs on
third parties who may attempt to evade sanctions against Iran, or to violate other
international commercial codes or agreements.
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In sum, so far, the issue of European trade or other boycotts against Israel is a threat
much more potential than real. But as an unofficial movement, and even as an
official response limited to Israeli settlements, it is gradually gaining strength in
some quarters - and could surge in the event that the current peace talks deadlock
or disband. That is why this hearing today, and your continuing attention to the
issue, are of so much value to the U.S. national interest in Israel's security, in
economic partnership with Israel, and ultimately in Israeli-Palestinian peace.
46
Mr. POE. Thank you, Dr. Pollock.
Mr. Perles.
STATEMENT OF MR. STEVEN PERLES, FOUNDER AND SENIOR
PARTNER, PERLES LAW FIRM, P.C.
Mr. PERLES. Thank you, Mr. Chairman, Mr. Sherman. You know,
before I begin my comments this morning, I will say that I do think
senior members of the Bar have an obligation to help launch the
careers of younger generation of lawyers.
It is why I teach, and in that spirit I would like to introduce Ms.
Kristin Stitchers to the committee. Ms. Stitchers is my clerk and
she is a law student at the George Mason University in northern
Virginia. Thank you.
We have been studying the material support of terrorist attacks
around the globe, particularly Palestinian terrorist attacks that result in the death or personal injury of United States nationals since
1995.
And I would break that material support into two tiers because
it has been our observation over the last almost 20 years that there
really are two tiers of Palestinian terrorists.
At theyou have an upper level, terrorists like Hassan Salameh
whose activities killed Matthew Eisenfeld and Sara Duker. Matthew was from Connecticut. Sara was from New Jersey.
Now, Hassan Salameh was recruited by Iran in Gaza. He was
smuggled through Egypt into the Sudan, flown on an Iranian military aircraft to Iran. He was trained in Iran and then he was returned through the Sudan and Egypt back into Gaza.
One of the more perplexing things about that attack is when we
looked at the forensics of the bomb, the energetic was a plastic explosive that had been made in the United States for which there
is only one customer and that is the United States Department of
Defense.
And, candidly, I could not figure out how a plastic explosive
made for the Defense Department wound up in a Hamas terrorists
gym bag.
As it turned out, Hassan Salameh was trainedand we learned
a great deal about his training curriculum in Iranhe was trained
by the Iranians not only to recruit suicide bombers but to recruit
suicide land mine defusers and he was taught how to defuse U.S.manufactured land mines.
In fact, we determined that the land minethat what had happened was when Hassan Salameh was coming back through Egypt
he recruited suicide land mine defusers, went into mine fields that
the Egyptian Government had set up under the provisions of the
Camp David Peace Accordsand, of course, mine fields are not
guarded, they are simply postedand they went in until they were
able to salvage an American-made mine that was designed to destroy a Soviet T54 tank, and I believe HassanI believe that energetic killed two U.S. nationals and 25 or 27 Israelis inside a bus.
The terrorist, and that is the suicide bomber, essentially was vaporized by the energetic inside of the bus. The lower-level terrorists
are people like the suicide bomber on the bus. Those are the kinds
of people that are getting martyr support.
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47
Now, we have what I consider to be probably the most important
case in the country right now on martyr payments and that is what
is referred to as Litle versus the Arab Bank or the Arab Bank series of cases.
Abigail Litle was the daughter of a professional administrator in
the Baptist Church. He was posted in Haifa. He took his daughterhe took his family with him to Israel. She did what all 13-,
14-year-old girls do.
She made friends with all the 13-, 14-year-old girls in her neighborhood. They all got on a bus together one morning to go to school.
They all died together on that bus. That terrorist receives martyr
payments that wereand this currency is not Iranian.
This currency is Saudi, and it was funneled through the Arab
Banks branch in Brooklyn, New York, which is why we brought
the action in New York. The Eisenfeld and Duker action was
brought under the Foreign Sovereign Immunities Act against Iran.
That was successfully prosecuted. This action was brought under
the Anti-Terror Act because the Arab Bank of Jordan is a private
actor. The remedy against private actors is under the ATA rather
than the Foreign Sovereign Immunities Act.
I am running out of time but I will say and I would emphasize
that to the best of our knowledge this is private Saudi money.
There is no Saudi Government involvement in that activity.
In my written statement, which has been filed for the record, we
do describe the fact that we are at something of a critical juncture
in that case now.
We are getting a great deal of push back from the Department
of State. That case is scheduled to go to trial in August. We hope
to keep it on schedule and we hope the committee will assist us in
doing that.
Thank you.
[The prepared statement of Mr. Perles follows:]
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48
STATEMENT OF
STEVEN R. PERLES
BEFORE THE
HOUSE COMMITTEE ON FOREIGN AFFAIRS
SUBCOMMITTEE ON TERRORTSM, NONPROLTFERA nON, AND TRADE
MARCH 5, 2014
Chairman Poe, Ranking Member Sherman, and members of the Subcommittee, my name is
Steven R. Pedes, founder and senior partner in the Pedes Law Firm, PC, and I appreciate the
opportunity to appear before you to discuss civil litigation on behalf of U.S. citizens killed or
injured as a result of acts of Palestinian terrorism. I have represented significant numbers of
Americans who were tragically murdered or injured in acts of Palestinian terrorism. What I
would like to speak about today is a public-private partnership and the proper role of the US.
government in these cases. Tn my experience, since 1995, these cases achieve their greatest
success when the US. government empowers the Americans victims by assisting with evidence,
identifying assets of the terrorists or their sponsors and by staying neutral when the sponsors of
terrorism attempt to leverage ongoing negotiations with the US. government for aid and support
in the court cases against them.
Tn 1996, my firm was one of the first to file lawsuits on behalf of American victims of terrorism.
We have seen the field of anti-terrorism litigation grow in cases against sovereign states and
foundations and corporations that allegedly aided and abetted acts of terrorism. Anti-terrorism
civil litigation has always been about deterring those who would materially support terrorism, as
terrorists from Abu Nidal to Bin Laden have all relied on someone else to provide their support.
Some of these sponsors are states like the Islamic Republic of Iran and some are private actors,
including the international financial institutions that facilitate the movement offunds destined for
terrorist entities.
The first successes in anti-terrorism litigation were scored against Iran, but only after I brought
an ultimately successful case called Princz v. Federal Republic afGermany against the Federal
Republic of Germany on behalf of all survivors of the Nazi concentration camp system who held
US. passports or were US. servicemen at the time of their incarceration. Tn 1996, using thenD.C. Circuit Judge Patricia Wald's dissenting opinion in Princz for guidance, Congress passed a
new exception to the FSTA, 28 USc. 1605(a)(7), for lawsuits "against a foreign state for
personal injury or death that was caused by an act of torture, extrajudicial killing, aircraft
sabotage, hostage taking" This exception denied sovereign immunity to any foreign state that
sponsored a terrorist attack upon US. citizens, as long as the state had already been officially
recognized as a state sponsor of terrorism by the US. Department of State.
Thus the Princz case led to my first case against Iran. In 1995, the Shaqaqi faction of the
Palestine Islamic Jihad detonated a bomb that destroyed an Israeli bus and killed twenty year old
Alisa Flatow. I represented this family in Flatuw v. Islamic Republic ofIran, the first case
against Iran for state sponsorship of terrorism under the FSIA The piatow case documented the
links between the terrorist group that carried out the attack and Iran, which acted as a sponsor for
the group through the provision of support and training. In Flatow, 1 for the first time, a court
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49
found a foreign state liable for its sponsorship of a terrorist group that killed a US citizen and
awarded damages of roughly $229 million. As enforcement of Platow was winding down in the
United States, together with my co-counsel Thomas Fay, Tbrought a case in the United States
District Court for the District of Columbia against Iran for its complicity in the 1983 marine
barracks bombing in Beirut, Lebanon that caused the death of over 240 servicemen, captioned
Peterson v. Islamic Republic of Iran. Judge Royce C. Lamberth authored a May 30, 2003
opinion that adjudged Iran liable based upon the clear and convincing evidence linking Iran to
the 1983 attack 2 Subsequently, Judge Lamberth entered judgment against Iran for the 1983
bombing in excess of $4 billion 3 We are enforcing this judgment on behalf of over 1200
plaintiffs against Iranian assets worth $1.9 billion in the United States District Court for the
Southern District of New York 4 It should be noted that we were greatly aided in this effort by
the provision of information under seal by the Department of Treasury, which is an appropriate
role of government in these cases.
Currently, the most important case in the US. courts involving US. citizens injured in acts of
Palestinian terrorism is a case against a Middle Eastern bank for its conduct during the Second
Intifada. This is not a FSIA case but a case brought under 18 US.c. 2333, the Anti-Terrorism
Act or AT A, allowing a person "injured in his or her person, property, or business by reason of
an act of international terrorism" to sue to recover damages against non-state actors. The current
status of the case illustrates the need for cooperation between the US. government and the
attorneys who are bringing these cases on behalf of Americans against those terrorist and their
supporters who injured them. T along with my co-counsel represent 54 Americans who were
murdered or physically injured, along with their families, during the Second Intifada. In total,
110 Americans in related cases are suing Arab Bank, a Jordanian international bank with
branches in the Palestinian Territories and, during the relevant time period, in New York City, in
by far the largest litigation on behalf of US. citizens injured by Palestinian terrorism. My simple
plea to the Committee is that the courts should be allowed to do their j ob in handling a civil
lawsuit involving a statute that is crucial in the fight against terrorism, and that various
governments should not be allowed to impose their political agenda on the outcome of these
cases. Let justice take its course.
These 110 US families filed civil actions beginning in 2004 under the US Anti-Terrorism Act
against Arab Bank. We allege and intend to prove the Bank knowingly provided direct material
support by laundering tens of millions of dollars through its New York branch to US
government-designated Foreign Terrorist Organizations (FTOs) such as RAMAS and their
agents, including Specially Designated Global Terrorists (SDGTs) and including via "insurance"
payments made by Saudi militants to imprisoned and martyred terrorists and their families This
includes individual terrorists (including particular terrorists who committed attacks on the
plaintifIs), senior Ramas operatives (including the Ramas "prime minister" in Gaza and the
leader of Ram as' military wing), charitable committees designated as SDGTs for their affiliation
with Ramas, and even what the trial judge delineated as evidence of wire transfers to a senior
US-designated Ramas leader identifying "Ramas" as the beneficiary, and evidence of multiple
, Peterson v. islamic Republic ol1ran, 264 F. Supp. 2d 46 (D.D.C. 2003).
Pelerson v. Islamic Republic of1ral1. 515 F. Supp. 2d 25 (D.DC. 2007)
4 Pelerson v. Islamic Republic of1ral1. CA 10-4518 (KBF), 2013 U.S. Dist. LEXIS 40470 (S.D.NY Feb.
28,2013)
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payments for families of suicide terrorists (identifying "martyr operations," ie, suicide attacks,
as the causes of death). But most of the evidence, at present, is hidden behind a wall of bank
secrecy laws, primarily those of the Palestinian Authority, in addition to Lebanon and Jordan'
The U.S. government has agreed with our concerns, and the filing of these cases led to the US.
Office of the Comptroller of the Currency (OCC) investigating the Bank in 2004, which resulted
in a $24 million monetary penalty against the Bank, the requirement of establishing a $420
million reserve, and the shutting down of its US. banking business by restricting the New York
branch from any banking activities. The OCC stated in an August 17, 2005 press release:
the agencies determined that the New York Branch of Arab Bank failed to
implement an adequate anti-money laundering program to comply with the Bank
Secrecy Act and manage the risks of money laundering and terrorist financing in
connection with United States dollar clearing transactions. The New York Branch
also violated the suspicious activity reporting requirements of the Bank Secrecy
Act 6
The OCC's Acting Comptroller later told Congress that its "review disclosed that the branch had
handled hundreds of suspicious wire transfers involving individuals and entities with the same or
similar names as suspected terrorists and terrorist organizations and that many of these individual
and entities were customers of Arab Bank or its affiliates." As a result of this review, the OCC
issued a cease and desist order, emphasizing "[tJhe inadequacy of the Branch's Bank Secrecy
Act controls over its funds transfer operations is especially serious in light of the high risk
characteristics of many of the transactions" and ordering conversion of the Bank's NY branch
into an agency with limited banking powers.
It has been close to a decade since the lead case, T.il1de v. Arab Rank, was filed and our clients'
day in court has been delayed for years by Arab Bank's refusal to produce the banking records at
the heart of the case based on so-called foreign banking secrecy laws. The trial court ruled in
2005 that foreign banking secrecy laws do not apply, but the Bank deliberately ignored multiple
production orders. Arab Bank's refusal to produce these records in violation of US law resulted
in the trial court issuing sanctions in 2010 designed to restore a level playing field and allow the
jury to draw certain inferences about the Arab Bank's conduct, based upon its calculated
withholding. Any defendant in a US. civil case must produce the records under its control that
go to the heart of a case, and the resulting sanction from the Bank's refusal to produce was
proper. Five US. judges at the trial court and Second Circuit have now ruled that the case
should go forward to trial. These families have waited almost ten years for their day in court;
there should be no further delay of the August trial setting.
Arab Bank has sought to delay trial at any cost Since 2010, the Bank through the Kingdom of
Jordan has been trying to enlist the US. State Department to enter a Statement ofInterest in the
case seeking to modify the scope of the trial court's discovery sanction. The Bank's argument,
which lacks any evidentiary support, is that civil liability for the damages its behavior caused the
110 American families will bankrupt the Bank and threaten the stability ofJordan and by
extension the entire Middle East Considering the size and profitability of the Bank, that
'Linde v. Arab Bank. PLC, 269 F.R.O. 186 (EON.Y. 2010).
6
http://www.fincen.gov/newsJoom/nr/pdl20050817.pdf (last visited February 28, 2014).
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argument is ridiculous. The Bank's profits for 2013 rose 43% to $501.9 million. Its net
operating income exceeded $1 billion. Its deposits were $34.4 billion in 2013. It has a $45.6
billion balance sheet spread across 30 countries and five continents. On April 21,2011,
Representatives Ileana Ros-Lehtinen and Howard Berman, the then-Chairwoman and Ranking
Member of the House Foreign Relations Committee, Steve Chabot and Brad Sherman wrote a
letter to Secretary of State Hillary Clinton which urged the State Department not to intervene in
the case, stating:
[I]ntervention by the State Department on Arab Bank's behalf, sua sponte, would
undermine the policies underlying the AT A that support the rights of victims of
international terrorism to seek recovery due to the damages they suffered .... In
conclusion, permitting foreign governments to elevate bank secrecy laws over the
interests of justice and, indirectly, extend a veil of secrecy in U.S. courts for
designated foreign terrorist organizations, would subvert U.S. policy goals
providing for the fair and open adjudication of claims brought under the AT A
Accordingly, we ask that the Department of State refrain from intervening in this
matter on behalf of Jordan or any foreign interests absent a formal judicial
request.
The State Department turned down the Jordanian government and refused to enter a Statement of
Interest and lend its weight to this argument even though, at that time, the Bank also faced the
pending claims of thousands of non-Americans who were murdered or injured during the Second
Intifada. Because the Second Circuit subsequently ruled in a different case 7 that certain Alien
Tort Statute claims could not go forward against corporations, the trial judge in our cases
dismissed the non-Americans' claims, and though they are on appeal, only the claims by the 110
American families are now pending in the trial court. Thus the Bank's argument regarding the
destabilization of the Middle East resulting from a civil damages award has lost considerable
merit from 2011, when even then it was not taken seriously. We applauded the State Department
for its principled stand in 2011.
Notwithstanding the trial court and Second Circuit rulings, last summer the Bank filed a petition
for writ of certiorari to the Supreme Court, and the Kingdom of Jordan submitted an amicus brief
in support of the Bank. On October 21, faced with Jordan's misrepresentation that the Kingdom
would be destabilized by the failure of the Bank, the Supreme Court had no choice but to invite
the U.S. Solicitor General to file a brief expressing the views of the United States. Review of the
discovery sanction by the Supreme Court would be an extraordinarily unusual circumstance. In
the normal course of civil litigation, litigants would rarely be able to contest such a ruling in the
Supreme Court. As the trial court stated on February 12, 2014:
[T]he petition is still nearly twice as likely to be denied as granted. Add to that the
fact that Judge Gershon's Order is an interlocutory discovery order for which
defendant seeks mandamus relief, and the likelihood of the Supreme Court
granting certiorari seems smaller still. In considering that, this Court is also noting
the Second Circuit panel unanimously determined that mandamus relief was
Kwhel v. Royal Dutch retroleum Co., 621 F.3d 111 (2d Cif. 2010), gffji., 133 S.Ct. 1659 (2013).
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inappropriate. This Court thus believes that there is a very good chance that the
Supreme Court will deny certiorari, allowing this trial to go forward in August.
The mundane legal issues at the center of the petition to the Supreme Court are not worthy of
Supreme Court review. The US. government is currently undergoing an interagency review
process to detennine whether to submit a brief and what position to take. We understand the
State Department now supports the US. government submitting a brief that would support the
Bank's request for review ofthe discovery order. We also understand that the U.S. government
agencies concerned with the role played by international banks in tax evasion, money laundering
and terrorism financing are opposed to the Bank's petition for Supreme Court review. Terror
victims share a commonality of concern and principle with such agencies.
Nor should the foreign banking laws raised by the Bank give the Committee any pause.
Congress has already decided between the competing policy goals behind banking secrecy laws
and laws enabling US. victims of terrorism to sue those who injured them through acts of
international terrorism. Congress passed the AT A, 18 US.c. sec. 2331, et seq., to enable US.
citizens to sue those who financially support acts of international terrorism. The ATA's civil
remedy plainly contemplates extraterritorial application. Acts of "international terrorism" are
defined by the ATA in relevant part as acts that "occur primarily outside the territorial
jurisdiction of the United States," 18 US.c. 2331 (1 )(C). Senator Grassley, who sponsored the
original ATA act, explained that it "empowers victims with all the weapons available in civil
litigation, including: Subpoenas for financial records, banking infonnation, and shipping
receipts- this bill provides victims with the tools necessary to find terrorists' assets and seize
them." Given that the law explicitly empowers US. citizens to sue those who lend support to
acts of international terrorism, the ATA was implicitly crafted to combat the financing of
terrorism. The Executive Branch has agreed. Specifically, in Boim 1'. Holy hmd Foundationjor
Relief & Develop., the Justice Department advised the Seventh Circuit Court of Appeals that
"[t]he provision at issue -- 18 USc. 2333(a) -- was supported by the Executive Branch as an
effective weapon in the battle against international terrorism; when correctly applied, it
discourages those who would provide financing that is later used for terrorist attacks'" Thus, the
Bank is precisely the type of defendant Congress had in mind when it passed the ATA Allowing
a foreign bank to raise a foreign banking secrecy law, over the denial of the trial court and
appellate court, would nullify the ATA and deny Congress's intent in passing it
The bank secrecy defense is a final, desperate roll of the dice by the Bank - especially
considering it is undisputed that Arab Bank did disclose secret customer infonnation to US.
authorities without even notifying, let alone seeking authorization irom, the relevant foreign
states. Arab Bank produced internal banking records to the OCC during the OCC's 2004
investigation of the Bank that followed the filing of the Linde lawsuit Arab Bank was never
prosecuted for those disclosures. Jordan and Lebanon are signatories of the Middle East and
North Africa Financial Action Task Force, and have expressly adopted a policy not to rely on
bank secrecy laws as a basis for protecting information related to money laundering and terrorist
iinancing.
8 Briefforthe United States as Amicus Curiae at * 1, Boirn v. Holy Land Foltndarioi1. 2008 WL 3993242.
(7th Cir Aug. 21. 2008).
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Finally, it is relevant that the Bank invokes bank secrecy to protect the privacy interests often
customers the Bank has admitted are Specially Designated Global Terrorists, as well as dozens
of customers identifiable as the senior leadership of a Foreign Terrorist Organization, Hamas,
and its military brigades, persons wounded or imprisoned in terrorist operations, and families of
"martyrs" killed in "martyrdom operations" (including specifically-identified terror attacks that
killed and injured plaintiffs in this lawsuit).
At times, the U.S. Government has been a strong supporter of anti-terrorism litigation, and the
State Department has been able to playa constructive role in the past. In 2008, there were a
number of cases in U.S. courts progressing against Libya to provide compensation for its
sensational acts of terrorism against US. citizens in 1980s and 1990s, including the survivors of
the 1986 LaBelle Discotheque. Libya, anxious to reestablish relations with the United States,
was unable to make much progress as State Department officials and members of Congress
blocked rapprochement until the claims were satisfied. The primary cases that drove the
agreement with Libya forward were the Lockerbie Pan Am 103 bombing and the LaBelle
discotheque bombing case. In August 2008, the governments of Libya and the US. reached an
agreement where Libya agreed to pay the US $1.5 billion in settlement of all outstanding
c1aims9 Though many victims were dissatisfied with this result and felt the US. government
made a politically expedient settlement at the expense of fair compensation of all victims and
survivors of Libyan terrorism, the level of US. government participation in the vindication of
private causes of action was unique. While it may have been preferable to see more done on
behalf of victims, US. government support for the Libyan cases was vital to their eventual
settlement. The resolution of the Libya cases in 2008-10 for Libya's past acts of state
sponsorship of terrorism illustrates how advocates for victims of state sponsorship of terrorism
can provide ammunition to the State Department in its advancement of U S. policy and how the
two can work together to achieve their goals. Such a public-private partnership does not happen
often because of the absence of an institutional voice for victims of terrorism at the State
Department.
One way to fix this is to statutorily create an office for terror victims' assistance ("L TVA"),
based upon The Office of the Assistant Legal Adviser for International Claims and Investment
Disputes LlCID la-which would deal with providing assistance for US victims of terrorism as
LCID provides assistance to US. companies with foreign investment disputes. What is referred
to as the "Libya model" worked well because both the State Department and the lawyers
representing US. victims of Libyan terrorism worked toward the ultimate goal of victim
compensation, even in difficult times when the partnership was strained by inherently divergent
interests. The creation of the LTVA oflice would lay the groundwork for the tuture replication
of the successful results of the Libya model. The Libya model worked because of a temporary
and quasi-institutional voice for victims of Libyan terrorism at the State Department.
Libyan Claims Resolution Act. Pub. L. No. 110-30 I, 122 Stat. 2999 (2008)
"The Office oftbe Assistant Legal Adviser for International Claims and Investment Disputes (LlClD) is
tbe largest office in the Department of State's Office ofthe Legal Ad,iser. It represents the United States
and coordinates activities witbin and outside the Department with respect to all aspects of international
claims and investment disputes." http://www.state.gov/s/llc3433.htm (last visited February 28, 2014).
9
10
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Indeed the Executive Branch has played an instrumental role in several Foreign Sovereign
Immunities Act (FSIA) cases against the Islamic Republic of Iran and the Syrian Arab Republic.
Under subpoena, the Department of Treasury has provided information regarding the location of
frozen assets of Iran or Syria to U.S. victims of terrorism as judgment creditors. In the 650 5th
Avenue case in the United States District Court for the Southern District of New York", several
groups of terrorism victims have worked hand-in-hand with U.S. federal prosecutors for years in
a civil forfeiture case against the office tower at 650 Fifth Avenue, which belongs to groups
which have allegedly money laundered for Iran and violated US-Iran sanctions. As a result of
this cooperation, the US. government plans to sell the building and turn over the proceeds to the
families of those victims of Iranian terrorism who have worked with the government. There
currently exist several types of US. federal rewards programs for cooperation and assistance
leading to convictions and asset seizures. The Rewards for Justice program, 22 U.S.c.
2708(b )(7), rewards the provision of information provided to the US government assisting in
"the disruption offinancial mechanisms" of terrorist organizations. Whenever legally
permissible, I have provided information to US. government agencies to assist in their legal
efforts against terrorists and their supporters. This type of cooperation has furthered the
Congressional policies behind the enactment of anti-terrorism legislation. The State Department
should either act as a proponent of such policies, as it did with the Libya model, or neutrally, as it
did in 2011 in the Arab Bank case when it refused the Jordanian government's request to enter
this case and file a Statement ofTnterest in favor of modifying the scope of the trial court's
discovery sanction. We have asked the State Department to playa productive role as an
interlocutor with the Jordan and the Bank to bring the matter to a conclusion acceptable to all
parties. That would be the proper role of the US government.
The key to a successful public-private partnership is cooperation. The prosecution of these cases
fulfills important Congressional policies such as victim compensation, the deterrence of
terrorism with financial penalties and the production of intelligence for US. agencies, when
legally permissible. But these goals can be not reached unless the courts are allowed to do their
job. It is our opinion, and the courts have agreed, that the policy goals of compensating
American victims of international terrorism and deterring financiers of international terrorism
should be favored over foreign bank secrecy laws. And Congress expressly empowered the
courts to make these decisions when it passed the AT A. The State Department should make the
same decision now that it made in 2011, which is to deny the request to interfere in the progress
of this lawsuit and allow no further delay in the American victims' quest for justice.
II
In re: 650 Fifth Aven1le and Related Properties, CA 08-10934 (KBF).
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Perles Law Firm, PC representative cases
SYRIA
1. Gates v. Syrian Arab Republic, CA 06-1500 (D.D.C.) (RMC)
CASE SUMMARY
Two wrongful deaths from Syrian sponsored beheadings by Al Qaeda in Iraq in 2004,
with 4 family members as plaintiffs. Final judgment awarded for $412,909,857.00.
**See Gates v. Syrian Arab Republic, 580 F. Supp. 2d 53 (D.D.C. 2008).
PROCEDURAL STATUS
Syria took an appeal to contest the court's jurisdictional basis, which was rejected by the
court of appeal s. Judgment enforcement underway.
2. Foley v. Syriau Arab Republic, CA 11-699 (D.D.C.) (CKK)

CASE SUMMARY
Three wrongful deaths from Syrian sponsored beheadings of U.S. serviceman and the
assassination of American diplomat Lawrence Foley in Amman, Jordan by Al Qaeda in
Iraq in 2002, 2004 and 2006, with family members as plaintiffs.
PROCEDURAL STATUS
The complaint has been filed and is being served on defendants.
3. Baker v. Syrian Arab Republic, CA 03-749 (D.D.C.) (GK)

CASE SlJMMARY
Complaint filed with I wrongful death and two injured plaintitl's from a Syrian and
Libyan sponsored 1985 hijacking of an airplane and its ultimate destruction, with 18
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family members as plaintiffs.
56
PROCEDURAL STATUS
The case against Syria went to trial in March, 2010 resulting in an award of
$510,560,000.00. Judgment enforcement underway.
The claims against Libya did not go to trial because the Libyan defendants settled the
claims for approximately $18,000,000. The Libyan Claims Resolution Act ("LCRA"),
passed on July 31,2008 and signed by President Bush on August 4,2008, dismissed all
litigation against Libya. The Libya claims were, alternatively, successfully processed by
the Department of State or the Foreign Claims Settlement Commission.
4. Buonocore v. Syrian Arab Republic, CA 06-727 (D.D.C.) (GK)/(JMF)

CASE SUMMARY
Complaint filed with 5 wrongful deaths and six injured plaintiffs from Syrian and Libyan
sponsored airport shooting in Rome and Vienna during the Christmas holidays in 1985,
with 11 family members as plaintiffs.
PROCEDURAL STATUS
The case against Syria went to trial in February, 2011. Preliminary determination by the
magistrate judge finding Syria liable on April 10,2013.
claims for roughly $43,000,000. The Libyan Claims Resolution Act ("LCRA"), passed
on July 31, 2008 and signed by President Bush on August 4,2008, dismissed all litigation
against Libya. Most of the Libya claims were, alternatively, successfully processed by
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the Department of State or the Foreign Claims Settlement Commission. One claim
remains in litigation with the Department of State.
5. Certain Underwriters v. Syrian Arab Republic, CA 06-731 (D.D.C.)

(GK)/(JMF)
CASE SlJMMARY
12 alien and 1 US insurance companies suing for damages for a destroyed airplane hull as
a result of a Syrian and Libyan sponsored terrorist hij acking in 1985.
PROCEDURAL STATUS
The case against Syria went to trial in March, 2010. Damages of $51 ,574,997.89
awarded by magistrate judge on April 18,2012.
claims as a part of the Libyan Claims Resolution Act ("LCRA"), passed on July 31, 2008
and signed by President Bush on August 4, 2008, which dismissed all litigation against
Libya. The Foreign Claims Settlement Commission denied all claims on a jurisdictional
basis. As all Libya claims were dismissed pursuant to the LCRA and were also denied by
the Foreign Claims Settlement Commission on a jurisdictional basis, alternative remedies
are being studied.
6. Peterson, et al. v. Islamic Republic ofIran, CA 01-2094 (D.D.C.)(RCL)

and follow-on cases
CASE SUMMARY
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Plaintiffs are over 1200 widows, orphans, siblings and survivors of the Islamic Republic
of Iran's bombing of the Beirut Marine Corps Barracks in 1983, resulting in the murder
of241 US servicemen, who were in Lebanon as United Nations peacekeepers. This case
required the development of evidence regarding Iran's material support of Hezbollah and
Iran's direct role in the Marine Corp barracks bombing.
PROCEDURAL STATUS
Final judgment for approximately $4.2 billion in compensatory damages. Enforcement
actions have been filed in several judicial districts against Iranian assets. On Feb. 28,
2013 the United States Court for the Southern Di strict of New York ordered the turnover
of$1.9 billion in Iranian assets to the Marine families, and other terrorism victim
judgment creditors. A further enforcement action against Iran is proceeding under seal.
7. Flatow v. Islamic Republic of Iran, CA 97-396 (D.D.C.) (RCL)

CASE SUMMARY
Counsel for plaintiff in the first successful action against a foreign state for the death of a
United States national as a result of an Iranian-sponsored bus bombing. $247,513,220.00
final judgment - $225,000,000 punitive damage award remains unsatisfied.
"See Flatow v. Islamic Republic of Iran, 999 F. Supp. 1 (DDC. 1998)
PROCEDURAL STATUS
Compensatory judgment has been collected and ongoing collection effort in the European
Union for the punitive portion of the judgment. Italian enforcement proceedings under
way at the Italian Supreme Court. It is anticipated that ultimately the claims in the Italian
court system will be decided by the European Court of Human Rights.
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8. EisenfeldlDuker v. Islamic Republic of Iran, CA 98-1945 (D.D.C.) (RCL)
CASE SUMMARY
Counsel for plaintiff in a successful action against a foreign state for the death of two
United States nationals as a result of an Iranian-sponsored bus bombing. $327,161,002.00
final judgment - $300,000,000 punitive damage award remains unsatisfied.
**See Eisenfeld v. Islamic Republic ofIran, 172 F. Supp. 2d 1 (D.D.C 2000).
PROCEDURAL STATUS
Compensatory judgment has been collected and ongoing collection effort in the European
Union for the punitive portion of the judgment. Italian enforcement proceedings under
way at the Italian Supreme Court. It is anticipated that ultimately the claims in the Italian
court system will be decided by the European Court of Human Rights.
9. Ellis v. Islamic Republic of Iran, CA 05-220 (D.D.C.)(RMU)

CASE SUMMARY
Lawsuit against the Islamic Republic ofIran for its support of the terrorist who caused a
triple suicide bombing on Ben Yuhada Mall
PROCEDURAL STATUS
Damages of $1,704,457 awarded on July 3, 2012. Enforcement proceedings underway.
10. Jenco v. Islamic Republic ofIran, CA 00-549 (D.D.C.) (RCL)

CASE SlJMMARY
Counsel for plaintiiIs in a successful action against the Islamic Republic ofIran for the
hostage taking and torture of a Catholic priest from the United States as a result of an act
of state-sponsored terrorism in Beirut, Lebanon.
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$314,640,000.00 final judgment - $300,000,000 punitive damage award remains

unsatisfied.
"See Jenco v. Islamic Republic of Iran, 154 F. Supp. 2d 27 (DD.C 2001).
PROCEDURAL STATUS
Final judgment issued and compensatory damages collected. There is no current active
enforcement program for the unsatisiied punitive damages.
11. Beecham v. Great Socialist People's Libyan Arab Jamahiriya, CA 012243 (RWR)
CASE SUMMARY
Action on behalf of 93 off-duty U. S. service personnel who were killed or injured by the
Libyan terrorist bombing of the LaBelle discotheque in Berlin, Germany in 1986.
Defendants agreed to settle the case for $276,000,000.00 including the 38 plaintiffs who
were our clients for the sum of $3,000,000.00 each.
PROCEDURAL STATUS
The Libyan Claims Resolution Act ("LCRA"), passed on July 31, 2008 and signed by
President Bush on August 4, 2008, dismissed all litigation against Libya. All claimants
have been awarded compensation in the settlement achieved by the LCRA.
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61
12. Clay v. Great Socialist People's Libyan Arab Jamahiriya, CA 06-707
(RWR)
CASE SlJMMARY
Two U.S. servicemen were injured by the Libyan terrorist bombing while relaxing offduty at the LaBelle discotheque in Berlin, Germany in 1986.
PROCEDlJRAL STATlJS
President Bush on August 4, 2008, dismissed all litigation against Libya. One claim
compensated for $3 million at Foreign Claims Settlement Commission.
13. Harris v. Great Socialist People's Libyan Arab Jamahiriya, CA 06-732

(RWR)
CASE SUMMARY
Represent a family whose husband and father died from injuries he received in the La
Belle Discotheque bombing in Berlin on April 5, 1986.
PROCEDlJRAL STATlJS
President Bush on August 4, 2008, dismissed all litigation against Libya. The family's
claim was compensated by the Foreign Claims Settlement Commission.
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14. Pan Am liability carriers v. Libya - settlement activities
CASE SUMMARY
Consulting role for several participating underwriters of Pan Am from the 1986
Lockerbie bombing. Their damage claims consist of the value ofliability claims paid by
Pan Am liability insurers to the Pan Am families.
PROCEDURAL STATUS
The Libyan Claims Resolution Act CLCRA"), passed on July 31, 2008 and signed by
President Bush on August 4,2008, dismissed all litigation against Libya. The Foreign
Claims Settlement Commission denied the Libya claims on ajurisdictional basis. As all
Libya claims were dismissed pursuant to the LCRA and were also denied by the Foreign
Claims Settlement Commission on a jurisdictional basis, alternative remedies are being
studied.
BANK MONEY LAUNDERING AND TERRORIST FINANCING
15. Litle v, Arab Bank, CA 04-5449 (E.D,N,Y.)(NG)/(VVP)

CASE SUMMARY
41 families sued the Arab Bank, PLC for its direct participation in funding and
facilitating Palestinian terrorists during the Second Intifada under the AT A.
PROCEDURAL STATUS
Arab Bank's motion dismiss has been denied and the court awarded considerable
discovery sanctions against the Arab Bank for its refusal to produce volumes of key
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evidence. Absent a Statement of Interest by the Solicitor General on behalf of the
Department of State, trial is expected in August of 2014.
16. Weiss v. National Westminster Bank, CA 05-4622
(E.D.N.Y.)(CPS)/(MDG), Wolfv. Credit Lyonnais, CA 07-914
(E.D.N.Y.)(CPS)/(MDG)
CASE SlJMMARY
Plaintiffs include 14 families who sued both the Credit Lyonnais and National
Westminster Bank, PLC under the ATA for their participation in the funding and
facilitating Palestinian terrorists during the Second Intifada.
PROCEDURAL STATUS
Motions to dismiss by the banks denied. The cases are at the motion for summary
judgment stage.
17. Amduso v. Republic of Sudan, CA 08-1361 (D.D.C.)(JDB)

CASE SUMMARY
Complaint filed with 2 US citizens and over 400 Kenyan and Tanzanian citizens, who
were either working as U.S. employees at the embassies or are their family members,
injured as a result of the Iranian and Sudanese supported AI Qaeda twin embassy
bombings in 1998.
PROCEDURAL STATUS
Trial on liability took place in October, 2010 and the court found that Iran and Sudan
materially supported Al Qaeda when it destroyed the embassies. Damages proceedings
underway.
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PALESTINIAN AUTHORITY
18. Klieman v. Palestinian Authority, CA 04-1173 (D.D.C.) (PLF/JMF)
CASE SUMMARY
Complaint filed with 1 wrongful death from PA supported Hamas shooting and 5 family
members as plaintiffs.
PROCEDURAL STATUS
The PA's two motions to dismiss were denied and the case is in the discovery phase.
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65
Mr. POE. I want to thank all three of you for your superb testimony.
I will now recognize myself for some questions. Mr. Black, I want
you to be a little more specific, and I know that is hard for you to
do because you were very blunt and candid and specific.
Is U.S. money going to pay prisoners in Israeli jails that we
would consider terrorists?
Mr. BLACK. The answer is yes. It is illegal. Our Government, at
the highest level, knows it is illegal. Every hour of every day that
this money continues to go to the PA you risk the chance that another bus of more Americans will be blown up, and they will receive an official salary from the PA.
The PA is continually in debt and it relies upon donor countries
for this money. Now, when you ask the PA are you going to stop
using our money to pay these terrorists salaries, they have a term
for this and the term is called donor filth.
It is all over the media. It is all over the newspapers. It is in
public remarks, and approximately 40 percent of the entire PA
budget comes from donor countries and much of the rest comes
from remittances.
There is no question that this country is supporting terrorism.
Not because somebody is publishing a Web site but because somebody committed a specific act of terrorism and was paid on a sliding scale for the number of people that he killed. You are doing this
now.
Mr. POE. I am going to ask some more questions. Try to be a little shorter, if you can. Briefer, I guess, is the answera little more
specific. You know, I was a former judge and so I sentI mean,
people went to prison because they should have gone.
But the idea that we pay people to go to prison and the more serious the crime against society they get more money, that is ludicrous. It would be ludicrous in this country but now we are paying
people overseas.
The prisoners that are in these Palestinian jails, have they committed crimes against American citizens that are directly or indirectly receiving money from American taxpayers?
Mr. BLACK. Short answer, absolutely yes.
Mr. POE. How many people are in Israeli jails?
Mr. BLACK. Under this law, which only covers to terrorists and
does not cover shoplifters or burglars or any other types of prisoners that are not national security offenses, it is about 4,000. You
said about 4,500.
That would cover everybody. It is about 4,000 and none of them
think they are going to serve the sentence that they are given
5, 10, 20 yearsbecause they all believe they are going to get out
in the next prisoner swap or the next prisoner swap to discuss the
next prisoner swap.
Mr. POE. All right. There was a prisoner swap in October where
1,000 or so got out of Israeli jails. How many of those were terrorists?
Mr. BLACK. They were all terrorists and
Mr. POE. Okay. Thank you. Are any of thoseare any of those
people that are in Israeli jailsyou know, terrorist means different
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things to different folks. But are they members of foreign terrorist
organizations like Hamas?
Mr. BLACK. Many are not. Many are individual Palestinians who
have been impoverished by their own lack of enterprise in the Palestinian Authority and see American and EU tax money as a way
to become wealthy in their own land, and they are just individualized and incentivized by taxpayer money.
Mr. POE. Dr. Pollock, Mr. Black testified earlier that some of
these prisoners are getting up to $10,000 a month. So what isyou
know, as we now understand, these are killers who killed somebody.
The more serious the crime, the more you get from the Palestinian Authority. So what does a Palestinian that is not a criminal
making out there a month insomewhere in Israel? Just the average salarymonthly salary. Are they getting $10,000 a month?
Mr. POLLOCK. No, sir.
Mr. POE. What are they making? Do you know?
Mr. POLLOCK. The per capita income in the West Bank iswhich
is under Palestinian Authority rule, is estimated right now to be
approximately $4,000.
Mr. POE. A month?
Mr. POLLOCK. No.
Mr. POE. A year?
Mr. POLLOCK. A year, yes.
Mr. POE. So you get $4,000 a year per
Mr. POLLOCK. Per capita income. Right. Right.
Mr. POE. Per capita.
Mr. POLLOCK. So, clearly, this
Mr. POE. Crime pays. Pays very well. The more serious you commit the crime against Israelis, Americans, Western Europeans,
whoever, the more they are paid.
Mr. POLLOCK. Yes, sir.
Mr. POE. And they can give thisunderstand, Mr. Black, they
controlthe prisoner controls where the money goes. They can give
it back to a terrorist organization. They can give it to their motherin-law, their girlfriend.
Mr. BLACK. That is right. It is the POA and the POA changes
anytime they want it to change, and when I was in the British Parliament a couple of weeks ago Ione of the parliamentarians said
this is welfare to the families. It is not welfare to the families. It
can go to anyone the guy designates, including his own terror cell.
Mr. POE. Two quick questions. Explain what the Prisoners Club
is and explain what happens when these terrorists who are getting
money to go to prison to kill people get out. What happens when
they get out? Quickly, briefly.
Mr. BLACK. When they get out they get a pension and the pensionthis is money for life. So while we dont have any money here
to pay our own pensions they are getting the pension and the Prisoners Club
Mr. POE. Because they went to prison as a terrorist act they are
getting a pension.
Mr. BLACK. That is right.
Mr. POE. Because they are part of the government now.
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Mr. BLACK. And the Prisoners Club advocates to make sure they
get more money, more benefits, more bonuses, more prioritization
and job training.
Mr. POE. Thank you.
I will yield to the ranking member from California, Mr. Sherman.
Mr. SHERMAN. Thank you.
Dr. Pollock, thank you for your focus on the economic vibrancy
in Israel, and the judge and I have a bill to make Israel a visa
waiver country.
If that bill succeeds, we will see a lot more investment in the
United States because business people cant wait 3 or 4 weeks to
go make a business decision. I have never seen a deal that was
worth doing that would wait 3 weeks.
And it would also be the answer to those who try to make
Israelis feel like pariahs we ought to put out the welcome mat in
the most important country in the world.
You have described enterprises on the West Bank. Do these provide jobs for Palestinians?
Mr. POLLOCK. Yes, sir. They do. Most of Israels economic activity
on the West Bank including settlement construction provides jobs
for Palestinians.
It is actually mostly Palestinian workers who are physically
building the new housing that the Israelis are constructing in some
of these settlements and being paid decent salaries for that work.
Mr. SHERMAN. And the most recent controversies involved
Oxfam, an organization funded in part by the work of this committee, criticizing one of its board members for being a spokesperson for SodaStream.
Doesnt SodaStreamgreat soda, I might addarent most of the
employees Arab Palestinians?
Mr. POLLOCK. Yes, sir. Most of them are. It is a mix of employees. You have Palestinians and Israelis working together in the
SodaStream manufacturing facility in the West Bank.
I might just add parenthetically that Prime Minister Netanyahu,
in his speech to AIPAC yesterday, specifically referred to this issue
and had what I guess you would call colloquially a shout out to
Scarlett Johansson and ended his speech by saying, Frankly, my
dear Scarlett, I do give a damn.
Mr. SHERMAN. Mr. Black, among those getting these payments
from the PA for their terrorism, are there those who have killed or
injured American citizens?
Mr. BLACK. Yes. There are scores of American citizens who have
been killed or injured and many of the Palestinians who are receiving these American-funded salaries are perpetrators of those acts.
Mr. SHERMAN. I want to comment on some of the comments
made by my fellow Californians. I was with President Clinton
when we saw the PA charter changed and supposedly that was the
recognition of the Palestinians that Israel had a right to exist.
They then retreated through an artifice to well, Israel has a right
to exist but only as a second Palestinian state, by declaring that
any Arab person who claims that any member of their extended
family ever lived in Israel, and just this is a claim because there
are no records from the Ottoman Empire.
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It is not like you carried around a little ID from 1898. So any
Arabic-speaking person who makes that claim has a right to go and
live in Israel with their entire extended family. So we saw that position.
Now, my colleague from southern California also points out we
have got to listen to the Palestinians and their leaders. He is absolutely right. I have done a lot of that over the last 18 years.
Privately, they know that Israelthat peace iswith Israel as a
homeland for the Jewish people, that the right of return unless it
is symbolic and of no practical importance has to be swept away
if there is peace.
The problem is they enjoy the political advantages of fanning the
flames loudly and then quietly tell Members of Congress they know
they have got to go in the other direction.
The problem is that they have boxed themselves in. I am going
to astound my colleagues and yield back with 24 seconds.
Mr. POE. I thank the ranking member.
Before I yield to the otherone gentleman from California I
want to put in the record that while the EU boycotts Israel, Iran
is shipping arms to terrorists in Gaza. Earlier today, the Israeli
navy raided a ship in the Red Sea and seized dozens of advanced
rockets from Iran for the Palestinian terrorists in Gaza.
These rockets had a range that could hit anywhere in Israel. So
we cant forget about the Iranians in all of this.
I will yield 5 minutes to the gentleman from California, the ranking member of Europe, Eurasia and Emerging ThreatsMr. Rohrabacher.
Mr. ROHRABACHER. Thank you very much, Mr. Chairman.
I guess what I am getting out of this is that the old expression
follow the money is very applicable here, and I thank you, Mr.
Chairman, and I thank the panelists today for shining some light
on where the money is coming from and surprise, surprise, it is
coming from us.
I mean, holy cow. So, I mean, one would think that you follow
the money you are going to end up in, you know, some Damascus
or Tehran and instead it is right here in Washington, DC, and
right here in some of the money that we are allocating.
That needs to be corrected and thank you for pointing that out
to us. Over the years, I have been in many hearings like this where
we discuss terrorism and we discuss attacks, and terrorism is an
attack on a civilian and the Palestinians in this case have targeted
civilians in order to terrorize a population to achieve an objective.
And Iit seems to me that we have been listening to the Palestinians and before, 20 years ago when I first came here it seemed
to me that Israel wasnt listening. It seemed to me that Israel did
not have a plan of how to deal with the Palestinians and they
werent willing to.
They thought they should just disappear, become part of some
other country. Well, since that time I think Israel has made tremendous concessions to the Palestinians.
They have given them territory and land and a sample government that they could have once a full agreement is reached and
they have also recognized that the Palestinians will have a right
to a country as well.
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And it seems to me we have seen lots of concessions from the
Israelis but Ias time has gone on, I havent seen the concessions
from the Palestinians.
And as I say, I think all the Israelis that I have talked to and
all the Palestinians I have talked to have led me to conclude that
the only thing the Israelis really are looking for is an actual guarantee that the Palestinians believe they have a right to exist as a
country.
One of these things that separated us, as I say, is the right of
return that the Palestinians keep claiming, which is really a right
to eliminate Israel as a country because it would inundate what is
Israel with a foreign population.
Is there a possibility that we could change this to a right of compensation? Because the Palestinian argument is that in 1948 so
much land was confiscated from Palestinians and these people have
not been compensated for that land, thus they own it and thus they
should have a right to return.
I will get to my point and that is should we, number one, accept
right of compensation as something that perhaps could be an alternative to the right of return, and number two, where would you get
that money and justI want to throw this out to the panel as
wellwhen people talk about compensating people for thosethat
property that they lostthe Palestinians lost, at the same time, in
the 1940s Jews left lots of land behind and lots of property behind
in countriesMiddle East countries.
Whether it was Egypt or whether it was Syria or whether it was
Iraq or whether it was Iran, there were many Jews that were
forced out of their homes and property and I dont believe they
were ever compensated either.
Perhaps we could tell the governments that now have that valuable property that the Jews left in 1948 that that property should
be used as a means of compensating the Palestinians for the property that they lost. What do you think about that idea?
Mr. BLACK. Well, I wrote a book about that called The Farhud
about that very point. Approximately 790,000 Jews were expelled
from Arab countries. Shortly after the state of Israel began they
were made stateless. All of their property had been seized.
They had dwelled in peace in the Middle East for 1,000 years before Mohammed. They were sent to expulsion camps. The earrings
were pulled from their lobes.
The bracelets were yanked from their wrists and they were
forced into Israel by these Arab countries to create a demographic
time bomb. There was a small airline that was invented
Mr. ROHRABACHER. To get right to the point is that was a lot of
valuable property.
Mr. BLACK. That was millions.
Mr. ROHRABACHER. And so that valuable property, just a
thought, Mr. Chairman, that
Mr. BLACK. And it was registered, by the way.
Mr. ROHRABACHER. That could bethat might be able to be used
as a source of money by those countries to compensate the Palestinians for the property they lost when Israel became a country.
Just a thought.
Thank you very much, Mr. Chairman.
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Mr. POE. Thank you, Mr. Rohrabacher.
I do want to correct something for the record. I called you the
ranking member of your subcommittee, much to the delight of my
friends to the left. But you are the chairman and you will stay the
chairman, I suspect, a long time.
But anyway, I now recognize the gentleman from California, Mr.
Vargas, for 5 minutes.
Mr. VARGAS. Thank you very much, your Honor. I do call you
your Honor because I know you were a judge, too.
Mr. POE. And you need to call me that.
Mr. VARGAS. Yes, sir, and I always do.
First of all, I have to say it almost seems impossible to believe
that our Government is indirectly funding terrorists in prisons in
Israel andI mean, we certainly have the witnesses here testifying.
I think we need to bring thesome representative from the government forward, Mr. Chairman, at some point to either refute it
or to say that is the case because this is outrageous if it is the case.
Again, I had not heard about it previously. It hasnt been reported on any of the news stations that I watch. But it is outrageous and not a penny should go, of course, to any terrorist and
we need to get to the bottom of this. That is why I thank you for
bringing this forward.
I do want to ask some questions. The question was asked of us
and we could ask you by yourselves about BDSboycott, divest
and sanctionswhere the money is coming from. So I would ask
you where is this money coming from.
It seems, unfortunately, that they are picking up some steam
throughout the world and it is very unfortunate because I dont see
it anything less than just anti-Semitisma little bit shielded but
not much.
Could you tell us where the money is coming from for this movement? Dr. Pollock, you look like you are able to answer that.
Mr. POLLOCK. Thank you. Thank you for the question.
You mean money to fund the BDS movement?
Mr. VARGAS. Yes. Yes, sir.
Mr. POLLOCK. Yes. Well, I think not enoughat least to my
knowledge, not enough solid research has been done on exactly that
question so far and myso I am going to give you my judgement
and impression.
And that is that the money comes from a variety of sources all
over the world and there are some governments including, for example, the South African Government that is
Mr. VARGAS. Not our Government, though. Please tell me it is
not our Government at least.
Mr. POLLOCK. Not to my knowledge.
Mr. VARGAS. Okay. Good.
Mr. POLLOCK. That are active in funding chapters that areof
different organizations that are engaged in promoting boycotts
against Israel.
There are some academic institutions and societies, student organizations, for example, on various universities including some here
in the United States, that are very active in promoting this.
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I think their funding comes from a variety of individual donations and foundations. I am not personally aware of any government money that supports it.
Mr. VARGAS. Okay. Mr. Black, I saw that you were anxious to answer the question. Do you know, sir?
Mr. BLACK. Yes. The number-one source of BDS funding is taxpayers. Here is how it works. 501(c)(3) organizationsyou all remember the investigation I did on the Ford Foundation in which
they were funding all these anti-Semitic groups501(c)(3) groups
raise money and donate it to organizations involved in the BDS.
For each million dollars of tax exempt money, American taxpayers have to pony up $440,000. The number-one organization
which has been associated with this process has been the New
Israel Fund which gave hundreds of thousands of dollars to the Coalition of Women for Peace so that they could create a global infrastructure of boycotts including a database called Who Profits.
They stopped giving this money in 2011 but now they continue
to give hundreds of thousands of dollars to organizations like
Breaking the Silence, Adalah and Bisallam, which are absolutely
essential to keep the BDS alive. New Israel Fund.
Mr. VARGAS. Thank you.
Mr. Perles, do you have an answer to that, too?
Mr. PERLES. I do not, sir.
Mr. VARGAS. Okay. I think that that is something that we need
to act on also then. I see this movement. Of course, it has become
somewhat worldwide now and it seems to have a lot of money and
it seems that someone is orchestrating.
Again, it is nothing less than veiled anti-Semitism. I guess my
last question would be, you know, how do we thenhow do we
move forward then to make sure that these groups dont get the
moneythat our Government is not involved or implicated?
What would you do, Dr. Pollock? What would your solution be?
Mr. POLLOCK. Thank you, again, for the question.
I think there could be, as my fellow witness just noted, there
could be an opportunity to investigate the tax exempt status of organizations that might be knowingly or unknowingly funding activities that are either illegal or improper or not eligible for tax exempt status because they are political advocacy.
That is one possibility. But I do think that the most significant
way of addressing this issue is by raising public awareness about
it and I dont think that this is a lost cause even in Europe, if I
may say so with all due respect, to any Europeans who might be
here.
I do think that there are organizations in Europe who are certainly advocating BDS but there are also organizations, very good
ones, in Europe that are actively opposing it and fighting against
it and they deserve
Mr. VARGAS. My time has expired so I am going to thank you.
Mr. POLLOCK. Thank you.
Mr. VARGAS. Thank you, Mr. Chairman.
The Chair will recognize the gentleman from Pennsylvania, Mr.
Perry, for 5 minutes.
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Mr. PERRY. Thank you, Mr. Chairman, and thank you, gentlemen.
So this policy, this official policy, how longhow long has this
been in force? Mr. Black, anybody?
Mr. BLACK. Are you talking about the Law of the Prisoner?
Mr. PERRY. Yes.
Mr. BLACK. The Law of the Prisoner goes back years. It was an
unofficial policy before it was regularized into Palestinian law. The
actual law itself wasand its qualifications were read to me over
the phone by the Minister of the Ministry of Prisoners.
They have an entire ministry devoted to this. So it is years. And
may I also say that while
Mr. PERRY. Ten years or more?
Mr. BLACK. Or at least 10 to
Mr. PERRY. Okay. So it is nothing new, and to be clear, just to
make sure I understand this, there is no direct State Department
money that we can tell going to thegoing to this program or
is
Mr. BLACK. I didnt say that.
Mr. PERRY. Okay. You suggest
Mr. BLACK. I believe the money is going directly. Of course it is.
It is fungible. You cant give money to an al-Qaeda soup kitchen
and then say oh, and but this soup kitchen money is not going to
go to feed the troops.
Mr. PERRY. So if I can just give you a scenario and you can validate it for me. So State Department funds some USAID project in
thein the area and then that money is misappropriated andat
least portions of, and then put toward this project?
Mr. BLACK. The money goes into the PA. The PA doesnt have
its own currency. We are now investigating the routes by and the
foreign accounts that the PA uses and then the PA divvies up the
money and they borrow from various accounts including the army
account, the military account, the police account and
Mr. PERRY. Okay. So does thedoes the State Department just
wholesale give an appropriation to the PA?
Mr. BLACK. In some cases, yes.
Mr. PERRY. What is the level of funding, do you know? Do you
have any idea what kind of money?
Mr. BLACK. Well, I know what it is in England and hear a number of $440 million. I am not sure if it is block grants or if it is
targeted money. But all of this money goes into one pot, fungible.
It comes from thea Latin word that means mushroom.
Mr. PERRY. Is there nois there no accounting on theon State
Departments side for exactly how each dime is spent?
Mr. BLACK. They dont want to account for it.
Mr. PERRY. Okay. So who would beis thereis there a person
at State? Is there an agencyis there a person at State that we
can turn to, bring in here and have a discussion with that would
be responsible for the accounting?
Mr. BLACK. He is currently in Europe.
Mr. PERRY. Who is that person?
Mr. BLACK. Secretary Kerry.
Mr. PERRY. Thank you.
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So there has been a law on the books, in my understanding, since
1990 regarding victims of terrorism that has been where the
United States could extradite these individuals that have perpetrated the alleged crime.
To your knowledge, how manyhow many folks since that
timeI think there have been, according to what I am reading 54
U.S. citizens killed in Palestine terror attacks.
How many of those perpetrators that are alivenot, obviously,
the ones that have blown themselves up, you cant do much with
thembut the ones that have lived through their attacks have
been extradited back to the United States for prosecution?
Mr. BLACK. That is a legitimate question. I am going to pass it
to this gentleman here.
Mr. PERLES. Mr. Perry, first, let me thank you for the compliment in your opening remarks. It is very much appreciated. I
think you need to divide the world of Palestinian terrorist attacks
into two different categories.
If you are talking about Palestinian terrorist attacks that occur
outside of Israel such as aircraft hijackersfor example, we represented three U.S. nationals who were shot in the head execution
style and tossed out of an aircraft in Maltathe surviving Palestinian terrorist in that attack served 6 years in Malta and then
was freed without notice to the United States.
The U.S.the FBI chased that man to the end of the earth,
dragged him back out of Africa. He was prosecuted here in the U.S.
District Court for the District of Columbia and is currently serving
a life sentence.
We do a very good jobthe Justice Department, we as a nation,
the Justice Department does a very good job for attacks that occur
outside of Israel. With respect to attacks that occur inside of Israel,
to the best of my knowledge no one has ever
Mr. PERRY. Why is that?
Mr. PERLES. I think that is athat is a
Mr. PERRY. What iswhat is your opinion?
Mr. PERLES. My opinion?
Mr. PERRY. Yes. This is what you do. This is what you study, correct?
Mr. PERLES. This is what I do. We have had a lot of discussions
with the Department of Justice over the years. One of my clients,
Steve Flatow, who lost a daughter, Lisa, in a terrorist attack remains quite active in this area.
I think it is the view of the Department of State that were the
United States to prosecute a Palestinian terrorist for acts of terror
committed in Israel that it would somehow interfere with the ability of the Department of State to stand as a neutral or the
onus
Mr. PERRY. So my time has expired. I appreciate your answer.
Mr. Chairman, just let medoes thatdoes that policy cut
across the political grain in the United States, both Republican and
Democrat administrations, or is there a difference? With your indulgence, Mr. Chairman.
Mr. PERLES. No, no. There is no difference.
Mr. PERRY. Okay. Thank you. I appreciate your input.
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Mr. POE. The Chair recognizes the gentleman from California,
Mr. Lowenthal, for 5 minutes.
Mr. LOWENTHAL. Thank you. I want to follow up with the same
line of questioning the first, I think, Congressman Vargas raised
and then Congressman Perry about. It is so shocking for us to hear
about how U.S. funds are directly or indirectly supporting salaries
for convicted terrorists.
I think our assumption has always been that much of those
funds really areyou know, we promote through USAID toward
local economic growth or the well being and creation of stability
which will leadeconomic stability which will lead toward political
stability.
So the question I am raising is if these funds, as Mr. Black has
are co-mingled, they are thenwhatever funds go in to this big pot
and then out of that pot, what are you suggesting that we do right
now?
Mr. BLACK. Okay. Peace is possible in the Middle East. Some
35,000 Palestinians a day make a 1-hour to 2-hour ride to work in
equality in Israeli jobs.
But peace doesnt have a chance when you are paying people to
commit murder. What I would do if I were you, and I am notI
have no standing here.
Mr. LOWENTHAL. Absolutely, but we are just asking what you
would do.
Mr. BLACK. I would immediately by sunset stop all money to the
PA until this one program, this one law, is rescinded, then claw
back all of these moneys that have been paid over the years to kill
innocent civilians, and then resume the process along the lines that
Kerry and others have suggested, which is pay for peaceful coexistence and do not pay for murder. This House must stop paying for
murderers. Stop it today.
Mr. LOWENTHAL. Thank you.
Dr. Pollock, do you have any response to that? How are we
where do we go from here?
Mr. POLLOCK. I do agree that this PA policy is abhorrent and
that the United States should play no part, if we are, in supporting
it.
At the same time, I think that the peace process as it is currently underway, as I understand it from press reports because
many of the details arehave not been released officiallyas I understand it, the peace process that is currently underway is indeed
addressing many of these issues about coexistence, about settlements, about refugees both Jewish and Arab, about compensation
for past losses, about all of the other issues that are standing in
the way of peace.
And so I think it is important whatever we doin my own personal view, whatever we do about terrorist funding or other issues
to maintain a peace process and peace negotiations between Israel
and the Palestinian Authority.
That is also an important and essential part of the way forward,
in my view. I would point out one other aspect of this, which is
very closely related to it, and that is incitement to violence and to
terrorism on the part of the PAofficially Palestinian Authority in
Ramallah.
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I am not speaking here of Hamas, which we know incites to terrorism and violence against Israelis and Jews. But the PA itself
under Mahmoud Abbas and sometimes, I am sorry to say,
Mahmoud Abbas himself are also guilty of incitement to violence
and terrorism by glorifying terrorists.
Not just paying salaries for them but by calling them heroes and
role models for future generations. This is something that I personally have spent the last couple of years analyzing and documenting
and speaking to both Israelis and Palestinians about in great detail.
And I published on the Washington Institute Web site, if you will
permit me just sort of an unpaid commercial here, a very long report about this called Beyond Words: Causes, Consequences and
Cures for Palestinian Authority Hate Speech where I document
and analyze the reasons for and also the remedies for this kind of
rhetorical official glorification of terrorism on the part of the Palestinian Authority. This too is an issue that I think needs to be addressed in the context of the current peace talks.
Just as seriously as we talk about Jerusalem or refugees or
Israeli security or any other issue, the issue of incitement and hate
speech needs to be part of these diplomatic
Mr. LOWENTHAL. Thank you. Mr. Perles, do you have anything
to add?
Mr. PERLES. I would. You know, I must say I apologize. I am not
as colorful as my colleagues are here. Maybe I am more of a technocrat.
But speaking as thespeaking as the technocrat, what we found
in the Arab Bank case and in order to meet our burdens of proof
in this kind of litigation we really need to track this money and tie
particular payments to particular acts of violence.
What we find is what I could best describe is an abuse of bank
secrecythat is Palestinian bankPalestinian Authority bank secrecy laws, Jordanian bank secrecy laws, Lebanese bank secrecy
laws.
The problem really is very much akin to Credit Suisse using
Swiss bank secrecy laws to hide, if I read the newspapers correctly
recently, the economic accounts of some 22,000 Americans who
were engaged in income tax evasion.
In the Arab bank case, I believe a total of five Federal judges
two district court judges, three Federal appellate judgeshave now
accrued discovery sanctions against the Arab bank for its failure to
turn over discovery. The bank is relying inappropriately in the U.S.
court system on Palestinian, Jordanian and Lebanese bank secrecy
laws. That, by the way, is the nub of our current dispute with the
Department of State.
Mr. LOWENTHAL. Thank you, and I yield back.
Mr. POE. The Chair recognizes the gentleman from Florida, Mr.
Yoho, for 5 minutes.
Mr. YOHO. Thank you, Mr. Chairman. I appreciate it. Gentleman, I appreciate you being here and I find it unacceptable that
since mid-1990s we have given $5 billion to the Palestinian Authority in aid is what I have come up with and there is no accountability.
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And I see it over and over again that we give foreign aid for
these countries and, like you said, it is under a mushroom and we
know what that meansthe growing environment of a mushroomand that is what I feel like a lot of the time.
You said that you would cut it off by tonight. What would be the
ramifications if we were to do that, Mr. Black?
Mr. BLACK. You are being extorted right now. You are giving in
to it. Basically, the idea is if we stand up to terrorism they are not
going to sign a peace deal. They are never going to sign a peace
deal as long as they are being paid for terrorism.
Mr. YOHO. Right.
Mr. BLACK. Stop this funding today, and if it is that important
to them as they say it is, that they would rather starve than stop
this program, then they have spoken for themselves.
I believe that people in this neck of the woods want peace, Arab
and Jew. But you must give peace a chance and you cant keep rewarding this bad behavior.
If thisif this program is stopped forcibly by U.S. cessation of
funding, there will be a lot of noise and that would just typify what
the Arab street is like. But it will take leadership.
We just cant put people on salary for killing Americans, Israelis
and Europeans
Mr. YOHO. I agree.
Mr. BLACK [continuing]. In the most uncivilized fashion. Stop it
tonight if possible.
Mr. YOHO. Dr. Pollock, you were talking about the boycott. If the
PA and Israel, if an agreement does not work in the peace process,
do you see the boycott getting worse and increasing or do you think
it is going to be a nonissue?
Mr. POLLOCK. I think in Europe it will increase and I would like
to quote for the record a statement by the EU Ambassador to Israel
who said recently, and this isthis is a quote of what he said, not
my opinion.
He said,
If the talks are wrecked as a result of an Israeli settlement
announcement then the blame will be put squarely on Israels
doorstep. Israel will find itself increasingly isolated not necessarily because of any decisions taken at a government level
but because of decisions taken by a myriad of private economic
actors, be it companies, be it pension funds, be it consumers.
This is the EU Ambassador to Israel.
Mr. YOHO. Are you sayingare you finding thatis there antiIsraeli sentiment about the acquisition of land over the years?
Mr. POLLOCK. Yes.
Mr. YOHO. Is that why they are doing this?
Mr. POLLOCK. Yes. Yes.
Mr. YOHO. They are just getting to a point to where they are saying they are not going to tolerate this anymore? Is that the sentiment you are seeing?
Mr. POLLOCK. Yes. That is correct.
Mr. YOHO. I guess I want to ask all of you this. Do you feel the
release of the PA prisoners in Israel was a wise move with Sec-
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retary Kerry going over there and demanding that? Mr. Perles, if
you want to start.
Mr. PERLES. I can answer in a very succinct fashion. No.
Mr. YOHO. Dr. Pollock.
Mr. POLLOCK. I think that this was an Israeli Government decision, not an American demand, and the Israeli Government had a
choice of whether or not to prefer a settlement freeze or a prisoner
release and they chose a prisoner release.
Mr. YOHO. Mr. Black.
Mr. BLACK. Well, you have to ask yourself why was it so imperative that the killers be released, and that is because the PA places
a high premium on those among its citizens that kill civilians.
Mr. YOHO. Okay. And thenlet us seewould you say the U.S.
Government, particularly the State Department, is helpful in assisting the victims in these cases, Mr. Perles, in your experience?
Mr. PERLES. You know, that is athat is a difficult question for
me to ask in aor a difficult question for me to answer in a public
forum.
Mr. YOHO. Do you want to submit your answer?
Mr. PERLES. Let melet me say that it takes a lot to get the
State Department motivated to help people. They are not culturally, as an institution, helpful. When they decide that theyre
going to help people, they are tremendously effective.
So that what I have could best be described as a relationship in
constant tension with the State Department. Most of the time we
are in an adversarial posture. In the Arab bank case, for example,
we are currently in an adversarial posture.
When Libya claims the reconciliation process was going forward,
the Department of State determined that the interested victims
and the Departments interests were synonymous with one another
and the department was tremendously effective in assisting victims
and creating a settlement with the Libyan Government.
In fact, at the request of the Department of States legal advisors
office I went with then legal advisor John Bellenger to a DC bar
lunch honoring him and spoke his praises through the work his office had done in support of terror victims in that settlement.
So the answer is we have a very complicated relationship that is
always a tension.
Mr. YOHO. Okay. I am out of time and I appreciate all three of
you. Thank you. Thank you, Mr. Chairman.
Mr. POE. I thank the gentleman. The Chair will recognize for 5
minutes the gentleman from Illinois, Mr. Kinzinger.
Mr. KINZINGER. Thank you, Mr. Chairman.
It is interesting. This is a very interesting subject and, you know,
if we look at the wider Middle East and we look at what I would
call negotiations in Iran, you know, I think it is important.
Even though that is not the actual issue we are here to talk
about it is important to stress that I dont see any way that with
the interim agreement with Iran that we end up seeing an Iran
without the capability to enrich Uranium.
And so you see what is happening in those negotiations. You see
what is happening with the issues we talk about and there is a lot
to be very concerned with. And so I appreciate the three of you
coming here.
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I am probably not going to take all 5 minutes and asI had another hearing and so I came a little late so if these questions have
been asked I apologize.
But Mr. Pollock, what can Israel do to diversify its trade beyond
Europe so that this doesnt have quite the impact and Israel can
be strong without these boycotts?
Mr. POLLOCK. Yes, that is an excellent question. Thank you.
I think that the Israelis, both the private sector and the Israeli
Government, are already trying to move in that direction as a kind
of fail safe, just in case.
But the reality is that for the foreseeable future it is my professional judgment that the EU and other European countries who
may not be in the EU will remain very, very important trade and
investment partners for the Israeli economy.
And so the Israeli Government is currently engaged in trying to
estimate in a, I think, straightforward factual way what the consequences for the Israeli economy would be in the case ofin case
this boycott, divestment and sanctions movement does gather
strength in Europe.
But I want to emphasize that this is a potential threat. At the
moment, it is not a real threat to the Israeli economy. European
countries and European companies continue to trade on an increasing scale with Israel and to invest on an increasing scale with
Israel and to send tourists at increasing volumes to Israel.
This is not true of every single European country. You do see a
pattern in which some of the Scandinavian countries and Holland
in particular and Ireland in particular are pulling back to some extent from those economic relationships with Israel.
But that is more than offset by increasing economic relationships
with the other larger European economies.
Mr. KINZINGER. Yes. I mean, I think, obviously, it is in Europes
interest to have these great relationships and if you are going to
push any of your power anywhere maybe it ought to be somewhere
like Russia right now, something like that, with what is going on.
Mr. POLLOCK. Yes. I would agree with you, sir. If Europe is going
to impose sanctions it should be against Russia, not against Israel.
Mr. KINZINGER. It might make sense. It has been said that the
official Palestinian position is against boycotts. Can you elaborate
on that?
Mr. POLLOCK. Yes. Thank you.
Again, President Abbas was asked about this question on the occasion of the Nelson Mandela memorial service in South Africa not
long ago and he said quite publicly, and I want to emphasize this
was in Arabic to an Arab audience so it counts for more.
He said that the PA officially opposes boycotts against Israel. He
said we, Palestinians, are negotiating with Israel. Therefore, how
can we ask other people to boycott Israel if we are not boycotting
Israel.
Now, subsequently, unfortunately, and this is a pattern in Palestinian official messagingsubsequently, that statement was
walked back and watered down and I would say almost contradicted in statements by other senior Palestinian officialsnot
Abbas himself but some of his more senior colleagues in the PA
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Government who said, for example, that we dont advocate boycotts
against Israel but we do advocate boycotts against settlements.
Or that we dont advocate boycotts against Israel at a government level but we do advocate private boycotts against Israel. Or
who simply said, as Hanan Ashrawi did very publiclyshe is a
member of the PLO executive committee and an important spokeswoman for the PA Governmentwho said that boycotts against
Israel should be supported and that BDS should be supported because it is, again, as she put it, the Palestinian nonviolent resistance against Israeli occupation.
So what you have is a mixed message from the Palestinians.
Mr. KINZINGER. Thank you. Mr. Black, just quicklywhen these
folks receive this money that you are talking about is there anything that restricts them from giving that money to further terror
causes?
Mr. BLACK. None at all. They have a POA, a power of attorney.
It can change from time to time and they designate who the recipient is.
If the recipient is their girlfriend or their terrorist cell or their
attorney or their mother it can go anyto any destination that
they choose.
Mr. KINZINGER. Thank you.
Mr. Chairman, I yield back.
Mr. POE. I thank the gentleman. I appreciate the witnesses for
your excellent insightful testimony. Mr. Perles, especially on a personal note, thank you for the work you do for victims. Thank you
very much.
Mr. PERLES. Thank you, sir.
Mr. POE. Thank you, gentlemen. Oh, you have another question?
Mr. SHERMAN. No, not ajust a
Mr. POE. Comment?
Mr. SHERMAN. I also want to commend Mr. Perles for his record,
and as an old tax lawyer a couple of things for the record.
You just talked here that if you get a 44 percent Federal tax subsidy for these charitable contributions I think that is an insult to
my former colleagues and tax lawyers who wouldnt settle for less
than 60, 65 percent subsidy when you can make gifts of appreciated capital gain property reduce state as well as Federal income
taxes.
Also as to tax administration, a big chunk of the PAs revenue
is remitted to them by Israel, which collects for the PA their tariffs
and value added taxes.
The decision as to whether money, which is fungible, should be
turned over to an organization that does some good things and does
some absolutely terrible things is one we will wrestle with in the
future.
I yield back.
Mr. POE. I thank the gentleman. I thank the gentlemen once
again for their testimony.
This committee is adjourned.
[Whereupon, at 11:29 a.m., the committee was adjourned.]
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APPENDIX
MATERIAL SUBMITTED
FOR THE
RECORD
(81)
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SlJBCOMMITTEE HEARING NOTICE
U.S. HOUSE OF REPRESENTATIVES
W ASHTNGTON, DC 20515-6128
Subcommittee on Terrorism, Nonproliferation, and Trade
Ted Poe (R-TX), Chairman
TO:
MEMBERS OF THE COMMITTEE ON FOREIGN AFFAIRS
You are respectfully requested to attend an OPEN hearing of the Committee on Foreign
Affairs, to be held by the Subcommittee on Terrorism, Nonproliferation, and Trade in Room
2172 of the Rayburn House Oflice Building (and available live via the Committee website at
http:!;\vviw.foreignAffairshouscgov):
DATE:
Wednesday, March 5, 2014
TIME:
10:00 a.m.
SUBJECT:
Threats to Israel: Terrori st Funding and Trade Boycotts
WITNESSES:
Mr. Edwin Black

Author
David Pollock, Ph.D.
Kaufman Fellow
The Washil1b>ton Institute for Near East Policy
Mr. Steven Perles
Founder and Senior Partner
Perles Law Firm, PC
By Direction of the Chairman
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83
MINUTES OF SUBCOMMITTEE ON _ _ _ _ _1:_er_ro_r'--is'~IJ,'__N._o~IJP'_r_ol~iji_er"_aticco_n_a_"d_1:_r_",_Ie_ _ _ _ _ HEARING
Day
Wednesday
Starting Time
Recesses
Datc,_ _",U",a",r""c"h""5",,,""2"'Ol"'4'----_Room_ _ _"'2"'J"'72"---_ __

Ending Time
1000 a m
bI
11:29 a.m.
L - t 0 - J L-to _ _l L-to _ _l L-to _ _l L - t 0 - J L-to _ _ )
Presiding Member(s)
Chairman Poe
Check all ofillefollowing Illal "pp(v:

Open Session [Z]
Executivc (closed) Session
Televiscd [Z]
Electronically Recorded (taped) [Z]

Stenographic Record [Z]
CJ
TITLE OF HEARING:
Threats 10 Israel: Terrorist Funding and Trade Boycotts
SUBCOMMITTEE MEMBERS PRESENT:
Reps. Poe, Kinzinger, Vargas, Kennedy, Lowenthal, Perry, Sherman, Yoho, Cotton
NON-SUBCOMMITTEE MEMBERS PRESENT: (Mark with an
* if they are not members ~ffull committee,)
Rohrabacher
rn
HEARING WITNESSES: Same as meeting notice attached? Yes

No
(If "no ", please list below and include title, agency, department, or organization,)
STATEMENTS FOR THE RECORD: (List any statements submittedfor the record,)
TIME SCHEDULED TO RECONVENE _ _ __

or
TIME ADJOURNED 11:29 a.m.
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House Hearing, 113TH Congress - Threats To Israel: Terrorist Funding and Trade Boycotts

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THREATS TO ISRAEL: TERRORIST FUNDING AND

COMMITTEE ON FOREIGN AFFAIRS

Serial No. 113128

For sale by the Superintendent of Documents, U.S. Government Printing Office

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COMMITTEE ON FOREIGN AFFAIRS

THOMAS SHEEHY, Staff Director

JOE WILSON, South Carolina

TED POE, Texas, Chairman

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LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

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THREATS TO ISRAEL: TERRORIST FUNDING

The committee met, pursuant to notice, at 10 oclock a.m., in

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Mr. BLACK. I thank this committee for inviting me. I am Edwin

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FINANCING HIE FLAMES

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Direct Taxpayer Support for Terrorism

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with many other tall, obstructive barriers designed to keep warring

FINANCING THE FLAMES

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the hottest buttons and most emotional topics in the Palestinian

Direct Taxpayer Support for Terrorism

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willing to publically needle Palestinian leadership, generally, and the

FINANCING THE FLAMES

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